The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has approved 94 Decommissioning and Abandonment (D&A) plans since April 2023, representing liabilities of $4.424 billion, with $400 million already secured through escrow accounts and letters of credit.
Chief Executive Gbenga Komolafe disclosed this on Wednesday while addressing the Nigerian Extractive Industries Transparency Initiative (NEITI) Companies Forum in Lagos, stressing that the approvals were in strict compliance with the Petroleum Industry Act (PIA) 2021.
He explained that the liabilities would be progressively remitted over the lifespan of oilfields into dedicated escrow accounts, adding that recent divestment transactions had been guided by lessons from global failures in the North Sea, Gulf of Mexico, Canada, and Australia.
“Without a robust and enforceable framework for abandonment and decommissioning, divestment transitions can create lasting financial and environmental burdens. Nigeria is not immune, and we must avoid costly mistakes,” Komolafe said.
He cited recent transfers including NAOC to Oando Energy Resources, Equinor to Chappal Energies, Mobil to Seplat, Shell to Renaissance Africa Energy, and TotalEnergies to Telema Energies, noting that each transaction was tested against technical capacity, financial strength, and escrow-backed obligations.
According to him, beyond the $400 million secured, host community obligations had been honoured, while environmental remediation commitments worth $9.2 million were pledged pending gazetting of the Environmental Remediation Fund regulations.
Komolafe added that the commission was also enforcing domiciliation of escrow accounts within Nigeria to ensure transparency and accountability.
Executive Secretary of NEITI, Dr. Ogbonnaya Orji, insisted that compliance with industry audits was mandatory, not optional.
“Transparency and accountability are critical pillars for building investor confidence and strengthening citizens’ trust. Companies must fully comply with NEITI’s audit process to improve Nigeria’s business environment,” Orji said.
He noted that work on the 2024 NEITI Industry Reports had begun and urged companies to meet reporting deadlines.
At the forum, industry leaders also raised concerns over multiple demands for payments and data by agencies, which they said discouraged investment.
Emmanuel Addeh and Peter Uzoho
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