The House of Representatives Ad-Hoc Committee on Decommissioning and Abandonment in the oil sector has alleged that non-compliance with provisions of the Petroleum Industry Act (PIA) and other extant laws by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) is a major impediment.
The statement followed submissions by officials of NUPRC and NMDPRA at the resumed investigative hearing of the committee held at the National Assembly.
Representatives of the two agencies, authorised by letters from their Chief Executive Officers (CEOs), appeared on behalf of their bosses.
The Chief Executive of NUPRC, Farouk Ahmed was represented by the Executive Commissioner, Development and Production Engineering, Enorense Amadasu.
Similarly, the Chief Executive Officer of NMDPRA, Gbenga Komolafe, was represented by the Executive Director of Health, Safety, Environment and Communities, Dr Mustapha Lamorde.
It could be recalled that the House had inaugurated the committee to investigate operators’ and regulators’ adherence to the PIA in decommissioning and abandonment (D&A).
The probe, arising from concerns over a significant funding gap of about $20 billion and environmental and fiscal risks from aging assets, scrutinises companies’ D&A plans, financial provisions such as escrow accounts, and regulatory enforcement by agencies like NUPRC and NMDPRA, with a view to protecting communities and the environment from liabilities associated with abandoned infrastructure.
In their separate submissions, NUPRC, represented by Enorense Amadasu, and NMDPRA, represented by Dr Mustapha Lamorde, informed the committee that multiple factors have caused delays in implementing D&A regulations in the oil sector despite the provisions in the PIA.
They also cited legal technicalities within the Ministry of Justice, issues relating to the responsibilities of the Central Bank of Nigeria (CBN), escrow accounts, and other challenges.
The NUPRC stated:“So, our response was clear that the NUPRC has strongly enforced the provisions of sections 232 and 233 of the Petroleum Acts by the PIA 2021, which, together with the subsidiary legislative market classes, 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 submitted to the NUPRC is now approved, and 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 plan we review 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 close to its original state.”
In his remarks, Chairman of the Committee, Mr Bassey Akiba, lamented the delays 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,” he said.