Oil & Gas: NUPRC secures $400m for asset decommissioning, abandonment liabilities

By Obas Esiedesa, Abuja

The Chief Executive of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Gbenga Komolafe, has announced that Nigeria has secured more than $400 million in decommissioning and abandonment liabilities, as the Commission enforces stricter rules on recent oil and gas asset transfers.

Komolafe disclosed this on Wednesday at the Nigerian Extractive Industries Transparency Initiative (NEITI) Companies Forum in Lagos. He said the move was aimed at shielding Nigeria’s oil and gas sector from the costly experiences of other regions.

A statement by NUPRC’s Head of Media and Strategic Communications, Eniola Akinkuotu, noted that Komolafe, 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.”

He explained that lessons from the North Sea, where decommissioning costs are projected to hit £27 billion by 2032; the Gulf of Mexico with costs exceeding $9 billion; and Canada’s Alberta province with more than 97,000 inactive wells carrying liabilities estimated between C$30 billion and C$70 billion, informed the Commission’s approach.

According to him, these lessons guided recent divestment approvals involving major players such as NAOC to Oando Energy Resources; Equinor to Chappal Energies; Mobil Producing Nigeria Unlimited to Seplat Energies; SPDC to Renaissance Africa Energy; and TotalEnergies to Telema Energies.

“Without a robust and enforceable framework for abandonment and decommissioning, divestment transitions can create lasting financial and environmental burdens,” Komolafe said. “Nigeria is not immune to this challenge, which is why bold steps have been taken under the Petroleum Industry Act and regulatory actions to prevent costly mistakes.”

He disclosed that each 2024 divestment was subjected to rigorous scrutiny, including assessments of technical and financial capacity, as well as upfront escrow arrangements for decommissioning obligations.

“The results from 2024 speak for themselves. Over $400 million in pre-sale decommissioning and abandonment liabilities have been secured through Letters of Credit and escrow accounts,” he said. “Host Community Development Trust obligations are fully honoured, while environmental remediation commitments worth over $9.2 million have been pledged.”

Komolafe further revealed that since April 2023, NUPRC has approved 94 Decommissioning and Abandonment (D&A) plans, in line with the PIA. These represent liabilities of $4.424 billion, which will be remitted progressively over the life of the respective oil fields into designated escrow accounts.

At the event, NEITI’s Executive Secretary, Dr. Orji Ogbonnaya Orji, emphasized that compliance with NEITI’s audit process is not optional but a legal requirement for companies in Nigeria’s extractive industries.

He stressed that transparency and accountability remain vital for building investor confidence, strengthening public trust, and aligning Nigeria’s extractive sector with global best practices.

Dr. Orji added that the NEITI Companies Forum has become a key platform for fostering closer partnerships with oil, gas, and mining firms while improving Nigeria’s overall business environment.

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