The House of Representatives Ad-Hoc Committee on Decommissioning and Abandonment in the Oil sector has accused the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) of failing to comply with key provisions of the Petroleum Industry Act (PIA) and other relevant laws.
According to the committee, this lack of compliance is a major obstacle to effective decommissioning and abandonment operations in the Oil industry.
The House stated this following submissions by the officials of NUPRC and the NMDPRA at the resumed investigative objective of the committee held at the National Assembly.
The representatives of the two Agencies Chief Executive Officers (CEOs) presented letters authorising them to stand in for their bosses.
The Chief Executive, NUPRC, Farouk Ahmed was represented by the Executive Commissioner, Development and Production Engineering, Enorense Amadasu.
Similarly, the Chief Executive Officer, NMDPRA, Mr Gbenga Komolafe was represented by the Executive Director of Health, Safety, Environment and Communities, Dr. Mustapha Lamorde
The House had inaugurated the committee to investigate operators’ and regulators adherence to the PIA in decommissioning and abandonment (D&A).
The probe stems from concerns over a significant funding gap of about $20 billion and as well as environmental and fiscal risks from aging assets, scrutinises companies’ D&A plans, financial provisions like escrow accounts and regulatory enforcement by agencies like NUPRC and NMDPRA and to protect communities and the environment from liabilities of abandoned infrastructure.
In their separate submissions, the NUPRC represented by Enorense Amadasu and the NMDPRA represented by Dr Mustapha Lamorde informed the committee that “many factors have caused delays in the implementation of the regulations in the D&A in the oil sector despite the provisions in the PIA.”
They also cited some legal technicalities in the Ministry of Justice, issues with responsibility of the Central Bank of Nigeria (CBN), Escrow accounts as well as other challenges.
“So, our response was clear that the NUPRC has strongly enforced the provisions of section 232 and 233 of the petroleum acts by 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 by every field health plan that 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,” NUPRC stated.
In his remark, Chairman of the Committee, Mr. Bassey Akiba lamented the delays in implementing the PIA provisions and other extant laws.
He said; “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.