NUPRC secures $400m in decommissioning liabilities, tightens divestment rules
The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) says it has secured more than $400 million in decommissioning liabilities on recent oil and gas asset transfers.
Gbenga Komolafe, Chief Executive Officer (CEO) NUPRC, made the disclosure through his representative, on Thursday at the NEITI Companies Forum in Lagos.
“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,” he said.
Speaking further, Komolafe revealed that Nigeria is applying lessons from global cases that left countries with massive clean-up bills, citing cases of the North Sea, Gulf of Mexico amongst others.
According to him, in Australia, Northern Oil & Gas in 2019 left liabilities exceeding AU$200 million.
“These lessons guided our recent divestment approvals, from NAOC to Oando Energy Resources, Equinor to Chappal Energies, Mobil to Seplat Energies, Shell to Renaissance Africa Energy, and TotalEnergies to Telema Energies,” he revealed.
He also cited sections 232 and 233 of the Petroleum Industry Act (PIA), which place full responsibility for decommissioning and abandonment on licensees and lessees.
“Without a robust and enforceable framework, divestment transitions can create lasting financial and environmental burdens,” Komolafe said.
Speaking further, Efemona Bassey, representing the NUPRC chief, revealed that each divestment in 2024 tested the commission’s new structure.
He noted that host community trust obligations are being honoured and that environmental remediation commitments worth more than $9.2 million have been pledged.
“Since April 2023, we have approved 94 Decommissioning and Abandonment 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. The liabilities will be remitted progressively into escrow accounts,” he added.
The statement also revealed that the commission has resolved long-standing disputes with international oil companies over the domiciliation of escrow accounts.
