NIGERIA: ENDGAME ON GAS FLARING

C O N F I D E N T I A L SECTION 01 OF 02 ABUJA 003201

SIPDIS


E.O. 12958: DECL: 12/10/2011
TAGS: EPET SENV PGOV NI
SUBJECT: NIGERIA: ENDGAME ON GAS FLARING

REF: LAGOS 2841



1. (C) Summary: Minister of State for the Environment Imeh
Okopido has enlisted the World Bank, the Government of Norway
and environmentalists from around the world to support his
position over the issue of gas flaring in Nigeria.
Okopido,s personal crusade is to advance the deadline to end
gas flaring from 2008 to 2004. In this process, he has taken
on major petroleum companies and some GON heavyweights, in
particular Group Managing Director of the Nigerian National
Petroleum Corporation (NNPC) Jackson Gaius-Obaseki. The
former military government put forth the 2008 deadline in its
1997 economic plan &Vision 20108 and President Obasanjo
confirmed it during his 1999 election campaign. Upon
entering the Ministry of the Environment in 1999, Okopido
announced that flaring should end sooner not later. Okopido
is using Environmental Impact Assessments for exploration in
highly sought offshore plots to force competing firms to
submit plans to eliminate flaring by 2004.



2. (C) While other major producers say they can fully or
substantially comply with the 2004 target, Shell Nigeria
insists that it may never totally eliminate flaring and that
90 per cent reduction is impracticable before 2008.
Supported by new overseas allies and confident that President
Obasanjo will eventually favor him, Okopido plans to continue
his offensive into next year,s World Summit on Sustainable
Development (WSSD) in South Africa. Okopido is organizing
Nigeria,s chairmanship of the Partnership Conference at the
Summit. End summary.


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Preparing for the WSSD
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3. (SBU) On November 19, visiting Regional Environmental
Officer Richard Hawkins and EconOff called on Minister of
State for the Environment Imeh Okopido to inquire about
Nigerian preparations for the WSSD. Okopido explained that
Nigeria had two important roles: first as host of the Super
Preparatory Meeting in February of 2002, but also as the
chair of the Partnership Conference to be held during the
WSSD. Okopido said that he was coordinating preparations
among 14 Ministries for the Summit, but that arrangements
were not proceeding well in South Africa. Concerns over
funding were overshadowing preparations for the event itself.
"This may be our last chance to come up with and fund
projects that really will make a difference. After the WSSD,
when will we have another opportunity to focus world
attention and donor interest? Nigeria must play a major role
in getting ready," he stressed.


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Tempers aren,t the only things that flare
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4. (C) During the meeting, Okopido received a phone call from
his boss, Minister of the Environment Mohammed Kabir Said,
during which he launched into a discussion of Shell and the
NNPC. After hanging up, he explained that during his stop
over in London, the oil companies had offered to give him
spending money for shopping. He complained that too many in
the GON were swayed by such false generosity and tricked into
allowing the oil companies to mismanage national assets.



5. (SBU) Okopido eagerly launched into a discussion of his
anti-flaring campaign. He shared a copy of his November 8
speech presented at the margins of the COP 7 in Marrakech,
and talked about the decision by the Government of Norway and
the World Bank to back a global campaign against gas flaring.
His points were:
-- Gas flaring represents only a small percentage of
greenhouse gases, but included many of the most damaging
ones, especially methane;
-- 68 percent of Nigeria,s natural gas is now flared,
wasting a valuable national asset, damaging the local
ecosystem and endangering the global climate;
-- Nigerian flaring represents 19 percent of the world's
gas flaring with the rest of Africa accounting for another 19
percent;
-- Most of the oil companies are ready to replace flaring
with collection and distribution in an accelerated way but
they need to be pressured;
-- The Obasanjo Administration needs to show the people of
the Niger Delta environmental dividends before the
re-election campaign in 2003; and
-- Shell Nigeria was the sole major producer fighting the
initiative.
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International Assistance
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6. (SBU) Okopido had just returned from a conference on
Nigeria in Washington D.C., the COP 7 in Marrakech, and the
Global Anti-flaring Initiative Conference with the World Bank
and the Government of Norway in Oslo. His first day in the
office in two weeks, he lamented how ignorant most of the
country and even his staff were about the environmental
movement. &Here in Nigeria, they think our job is only
about rubbish removal.8



7. (SBU) Okopido asked the REO for $100,000 from the USG to
support the Super Prep Com to be led by President Obasanjo in
February 2002, and the Partnership Conference Nigeria chairs
at the WSSD. He stressed that, without identifying specific
goals and projects at the Super Prep Com, the WSSD would
become a diplomatic exercise without environmental or
development impact. He also asked the Embassy for support
in training a team from his Ministry on constructing and
maintaining a web site.



8. (C) After two weeks in Nigeria, Okopido said he would be
overseas again until just before Christmas. He was
optimistic about the Global Anti-flaring Initiative and felt
that despite constant pressure from the NNPC and others
within the Government to keep the 2008 deadline, that the
2004 target would prevail. "They (the oil companies) have
the technology, the capital and the long-term potential
profits to do it. They will have to accelerate their capital
expenditures and make the environment in Africa a priority,
like it is in other parts of the world."


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COMMENT: Political and Geological Realities
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9. (SBU) If the end of flaring is much closer than seemed
possible only a few years ago, much of the credit goes to the
multinationals, especially the U.S. companies who have
accelerated their plans for gas infrastructure investment.
Chevron,s role in the West African Gas Pipeline is just one
example. Also noteworthy is the increasing use of gas
reinjection technology to enhance oil yields.



10. (C) Shell, because of its extensive and widespread
on-shore fields, faces the biggest challenge. Costs
associated with collecting the gas are high and further
complicated by pipeline vandalism. Flaring will also be a
problem for the small indigenous firms bidding on the
marginal fields described in reftel. To operate such small
fields safely and economically, they will almost certainly
need to flare. Nigeria is, we have been reminded, "a gas
province, with associated oil."



11. (C) All of which does not change the political
significance of Okopido,s campaign. His confrontational
style has alienated many colleagues in the Nigerian
government, and at times irked the President. However, his
work has accelerated the decline in flaring. His challenge
will be to convince the Government to sustain the pressure.
Rigorous anti-flaring programs run up against important
political and economic priorities like the marginal field
initiative, and could interfere with election-year demands
for more oil revenue in a down market. End Comment.
Jeter