The House of Representatives has expressed grave concern over the failure of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) to implement relevant provisions of the Petroleum Industry Act, 2021, on the abandonment and decommissioning of oil facilities in the country.

The Ad-hoc Committee was mandated to investigate operators’ and regulators’ adherence to the PIA in decommissioning and abandonment (D&A), as well as concerns over a significant funding gap of about $20 billion and environmental and fiscal risks from ageing assets, and to scrutinise companies’ D&A plans and financial provisions, such as escrow accounts.

The House also mandated the Ad-hoc Committee to investigate regulatory enforcement by agencies like NUPRC and NMDPRA to protect communities and the environment from the liabilities of abandoned infrastructure.

Chairman of the Ad-hoc Committee on Decommissioning and Abandonment in the oil sector, Hon. Bassey Ekpenyong, who spoke during the resumed investigative hearing in Abuja, expressed displeasure over the delay in implementing the PIA provisions and other extant laws.

“The regulation is a regulation that was approved in 2003. And I want to believe that as soon as you did that, you submitted it to the Minister of Justice.”

In his presentation, the Chief Executive of NUPRC, Engineer Farouk Ahmed, who was represented by the Executive Commissioner, Development and Production Engineering, Mr Enorense Amadasu, dismissed the report.

He said: “Our response was clear that the NUPRC has strongly enforced the provisions of Section 232 and 233 of the PIA 2021, which, together with the subsidiary legislative market classes, cease and cease to serve any decommissioning and abandonment plan for their assets, and for which extensive engagements in the industry have been held to test ways of engagement in the industry, to the extent that every field health plan approved is submitted to the NUPRC now because they have approved, we also have to engage them for them to provide the plan.

“So it’s also important for us to understand that the D&A is actually the D&A plan that we review, then is actually for them to tell us what will happen at the end of the life cycle of the plan, just like you observed, such that at the end the environment will be restored back close to its original state.”

On his part, the NMDPRA Chief Executive Officer, Engineer Gbenga Komolafe, who was represented by the Executive Director of Health, Safety, Environment and Communities, Dr Mustafa Lamorde, informed the Ad-hoc Committee that many factors were responsible for the delays in the implementation of the regulations on decommissioning and abandonment in the oil sector, despite the provisions of the PIA.

Other impeding factors include legal technicalities at the Federal Ministry of Justice, issues regarding the responsibility of the Central Bank of Nigeria (CBN), escrow accounts, among others.

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