Russia: Companies guilty of wasting gas to face fines

The government is calling on oil companies to utilise more of the gas produced as a by-product of oil extraction – usually called associated gas. It wants the industry to reduce flaring – or burning off waste gas – and to increase its use by more than 90% over the next three years.

The issue has twice been mentioned by President Vladimir Putin as an area for major reform, but change in the industry is slow. Now, the Ministry of Natural Resources has promised to publish a list of fines to be levied on companies that fail to cut back on wastage. However, experts say that the facilities are not in place to make saving worth while.
Currently, about 20 billion cubic metres of gas is flared off annually in Russia – almost equivalent to peak production at the new Yuzhno-Russkoye field.

In the past the problem has been ignored, but now it’s again rearing its head as the issues of environmental management and production efficiency loom ever larger.

Oil companies believe that a government target of 95% use of the by-product can be achieved by 2011. They are also saying that support and significant infrastructure investment is needed.

Russia Today