ABUJA - Nigeria has awarded contracts to 42 companies under a programme to harness gas which is released as a byproduct of oil production, its petroleum regulator said on Wednesday.

The Nigerian government has previously said flaring costs it roughly $1 billion a year in lost revenue. Rather than being burned off, a process known as flaring, the gas can instead be used in power plants, in industry or exported.

The programme, which was first launched in 2016 to sell rights to capture and sell flared gas, had faced several delays, and missed a December 2022 target to award the contracts.

Nigerian Upstream Petroleum Regulatory Commission (NUPRC) said the successful bidders would develop 49 sites in the oil-producing Niger Delta. It did not name the companies.

"Reserve bidders' status has also been accorded some companies for the corresponding flare sites in case the preferred bidders fail to meet the terms and conditions stipulated," NUPRC said in a statement.

Gas flares are a health hazard to communities in oil producing regions and contribute to global warming, environmentalists say.

(Reporting by Camillus Eboh, writing by MacDonald Dzirutwe, editing by Alexander Smith)