NUPRC: Oil Firms Deposit $400m to Cover Decommissioning Liabilities

Nigeria has secured more than $400 million in decommissioning liabilities from oil and gas companies to safeguard the country against future financial and environmental risks, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has said.

Gbenga Komolafe, Chief Executive Officer of NUPRC, disclosed this during the Nigerian Extractive Industries Transparency Initiative (NEITI) Companies Forum held in Lagos. The commission was represented by Efemona Bassey, Deputy Director of Human Resources, Corporate Services, and Administration.

“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,” Komolafe said.

He explained that Nigeria was applying lessons from costly global divestment cases to avoid long-term liabilities. “Without a robust and enforceable framework for abandonment and decommissioning, divestment transitions can create lasting financial and environmental burdens,” he said.

The NUPRC boss cited global examples, including the North Sea, where decommissioning costs are projected at £27 billion by 2032, and Canada’s Alberta, where more than 97,000 inactive wells could cost between C$30 billion and C$70 billion to clean up.

Komolafe noted that recent divestments — including NAOC to Oando Energy Resources, Equinor to Chappal Energies, and Shell Petroleum Development Company (SPDC) to Renaissance Africa Energy — were opportunities to test Nigeria’s divestment framework.

See Also

MTN Backs Bosun Tijani’s Vision for Africa’s AI Leadership

“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 said.

He added that since April 2023, NUPRC has approved 94 Decommissioning and Abandonment (D&A) plans representing $4.424 billion in total liabilities, to be progressively remitted over the production life of fields into escrow accounts.