Thursday, September 11, 2025 - The Commission Chief Executive (CCE) of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Mr. Gbenga Komolafe, has disclosed that total liabilities for approved 94 Decommissioning and Abandonment (D&A) plans which were in strict alignment with the Petroleum Industry Act (PIA), currently stands at $4.424 billion.
The CCE
made the disclosure on Wednesday during his remarks at the Nigerian Extractive
Industries Transparency Initiative (NEITI) Companies Forum, held in Lagos.
The CCE,
who was represented by the Deputy Director, Human Resources, Corporate Services
& Administration, Efemona Bassey, spoke on the theme, “Divestments,
Liabilities, and the Impact of Ongoing Reforms on Extractive Companies in
Nigeria.”
“Since
April 2023, we have approved 94 Decommissioning and Abandonment (D&A)
plans, in strict alignment with the PIA. These approvals represent total
liabilities of $4.424 billion, arising from all Field Development Plans
submitted within this period, and will be remitted progressively over the
production life of the respective fields into designated escrow accounts,” he
said.
The CCE
added, “Without a robust and enforceable framework for abandonment and
decommissioning, divestment transitions can create lasting financial and
environmental burdens.
“Nigeria is not immune to this challenge, and if we are to
avert costly mistakes. It is precisely to avoid this outcome that Nigeria,
through the Petroleum Industry Act and subsequent regulatory actions, has taken
bold and decisive steps.”
The NUPRC boss highlighted Nigeria’s response to the recent
divestments in line with Sections 232 and 233 of the PIA which place full
responsibility for the decommissioning and abandonment of petroleum wells,
installations, structures, utilities, plants, and pipelines on licensees and
lessees.
Similarly, Chapter 3 of the PIA and Section 104 of the PIA,
establish specific obligations for host community development and environmental
remediation respectively.
He said each of the 2024
divestments provided a critical opportunity to put the Commission’s Divestment
Framework to test and action: rigorously assessing the technical capacity of
acquiring entities, verifying their financial strength, and securing decommissioning
and abandonment obligations through upfront escrow arrangements.
Komolafe said, “The results from
2024 speak for themselves. Over US$400 million in pre-sale decommissioning and
abandonment liabilities have been secured through Letters of Credit and escrow
accounts.
“Host Community Development Trust obligations are fully
honoured. Environmental remediation commitments worth over US$9.2 million have
been pledged while awaiting the formal gazetting of the ERF Regulations.”
He acknowledged the invaluable role of NUPRC partners, NEITI
and Oil Producers Trade Section (OPTS).
According to him, as the moral compass of the extractive
industry, NEITI has consistently ensured that NUPRC embedded transparency and
disclosure in all its regulatory processes while OPTS, the united voice of
producers, has supported us in shaping regulations that balance industry
realities with national priorities.
He added, “In addition to divestments, the Commission has
been working together with operators, particularly members of OPTS, on life
extension projects, ranging from facility integrity audits to subsea upgrades
and enhanced reservoir management measures that sustain safe production, delay
decommissioning, reduce environmental risks, and secure resilience across our
mature fields.”
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