Report: 2020 Nigerian oil industry environmental performance index

Overview

The Environmental Performance Index analyses annual emissions by oil-producing companies operating in the Niger Delta, the oil and gas-producing region of Nigeria. This includes total emissions and comparisons between companies, states, and countries – specifically oil spills and gas flaring. In 2020, Nigeria was the world’s 10th largest oil producer, and according to this analysis, had the highest emissions to production ratio – by far.

Rationale

SDN works to minimise the negative impacts of Nigeria’s oil and gas, and in publishing this report, we seek to increase access to key information on the environmental performance of the industry in the Niger Delta. We aim to enable constructive engagement on the policy solutions needed to minimise the negative impact of exploration and production, and ensure its benefits are distributed fairly, and ultimately harnessed, to enable Nigeria’s transition to clean energy.

Key messages

  • Oil and gas industry pollution reduced between 2019 and 2020. Yet so did two important factors: production and the ability of the regulator to document spills. Therefore, the results likely underestimate the environmental degradation for the year. 
  • The volume of oil spilled and the number of incidents were lower than previous years. In total, a minimum of 17,331 barrels of oil and other potential contaminants are recorded as spilled in the Niger Delta in 2020, across 409 separate incidents. This was a 52% reduction in volume, with a 57% reduction in average spill size, compared to 2019. More than 70% of all known oil spilled was in Rivers State – by far the highest for oil spills for the third year running. 
  • The volume of gas flared also decreased year-on-year, but continues to be a major contributor to greenhouse gas emissions. Over 300 billion scf of gas was flared in 2020, a 30% decrease on 2019. This volume remains equivalent to 18% of Nigeria’s CO2 emissions, or nearly as much as the entire emissions of Ghana. 
  • The highest total oil spill and gas flare emissions were generated by international oil companies (IOCs), namely Shell, ExxonMobil, and Eni, as well as the (then) state-owned oil company, the Nigerian National Petroleum Corporation (NNPC). These companies also have the highest production volumes.
  • In relative terms, domestic oil companies (DOCs) had higher oil spill and gas flare emissions for the volume of oil they produced. Chorus Energy, Energia, Pillar Oil, and Platform generated by far the highest emissions per barrel of oil (or equivalent) produced. This is concerning, since DOCs are taking over operations from IOCs, at an accelerating rate. Marginal fields (individual fields carved out of larger blocks) have particularly alarming emissions ratios, and the National Oil Company, NNPC, is by far the highest. 
  • A small number of companies were responsible for the majority of absolute oil spill and gas flare emissions. 96% of all recorded oil spilled is attributable to six companies (Shell, Eroton, NAOC, ND Western, Aiteo, and Heritage), while 54% of gas flared is attributable to only two (NNPC and ExxonMobil).
  • The 2020 Index ranks Consolidated Oil as the best environmental performer, and Shell as the worst. Consolidated was the only oil-producing company with no record of gas flaring or oil spills in the year, explaining it’s ranking. Shell was the largest oil-producing company for the year, but this does not excuse it from being the largest spiller by far, for the third year in a row.
  • Overall, the Nigerian oil and gas industry’s environmental record compares extremely poorly with international averages. Compared to the global average, companies operating in Nigeria spilled seven times more oil, and flared six times more gas, for every barrel of oil (or equivalent) they produced. 
  • There are major discrepancies among data sources on Nigerian oil and gas issues. The national oil company reports more than 660,000 barrels of crude oil “pipeline losses” for 2020, without further explanation. The data from the government regulator, NOSDRA’s Oil Spill Monitor (OSM), the source for this report, recorded just over 17,000 barrels spilled – just 3% of NNPC’s figure. There are also differences in gas flare volumes. As such, our analysis is indicative only, but our working assumption is that the true extent of the release of emissions into the Niger Delta’s environment is much higher than officially recorded.
  • To develop a clearer picture of industry emissions in Nigeria, greater transparency from government and industry is needed. The government has not published a detailed set of production figures for the sector since 2019, and this must be revived in the interest of transparency and accountability. Companies’ own reporting should include annual accounts for emissions, disaggregated and with a detailed description of impacts, as a minimum. Publishing this data would help inform action to address environmental concerns, and build mutual trust and accountability among all industry stakeholders. It is also essential to inform the public so they can advocate for effective policies and responses.
  •  

Open in a new tab.

Enjoy a good formula? Find out what methods we used (PDF download)

Dive in deep – our data-sets (Excel file download)

A full report too much? Check out our factsheet.

Related Posts