Reps fault NUPRC, NMDPRA over non-compliance with PIA decommissioning rules

The House of Representatives Ad-hoc Committee on Decommissioning and Abandonment has criticised the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) for allegedly failing to comply with key provisions of the Petroleum Industry Act (PIA) and other governing laws on decommissioning processes in the oil and gas sector.

The committee criticised the two agencies during its resumed investigative hearing at the National Assembly, following detailed presentations from both agencies.

Although the Chief Executive Officers of the two regulators were absent, they delegated senior officials who tendered formal authorisation letters.

The Chief Executive of NUPRC, Farouk Ahmed, was represented by Enorense Amadasu, Executive Commissioner for Development and Production Engineering.

The Chief Executive of NMDPRA, Gbenga Komolafe, was represented by Mustafa Lamorde, Executive Director, Health, Safety, Environment and Communities.

The House had inaugurated the committee to find out whether operators and regulators are adhering to PIA requirements on decommissioning and abandonment (D&A).

Lawmakers are concerned about a widening funding gap of about $20bn needed for the proper dismantling of ageing oil infrastructure, as well as the environmental and fiscal dangers posed by abandoned assets across the Niger Delta and other producing areas.

The investigation is scrutinising companies’ D&A plans, the adequacy of their financial provisions, including the establishment of escrow accounts, and the robustness of regulatory oversight by NUPRC and NMDPRA.

In their separate submissions, the two agencies admitted that several challenges had slowed the full implementation of D&A regulations, despite the clarity of the PIA. They outlined legal delays at the Ministry of Justice, procedural disagreements over the role of the Central Bank of Nigeria in managing escrow accounts, and technical gaps that still require harmonisation between regulators and operators.

Mr Amadasu, speaking for the NUPRC, maintained that the commission has taken steps to enforce sections 232 and 233 of the PIA, which mandate operators to prepare and update decommissioning and abandonment plans.

He explained that, “Every field development plan submitted to the NUPRC must now include a matching D&A plan. This ensures that operators clearly outline end-of-life actions for each asset, with the ultimate aim of restoring the environment to as close to its natural state as possible.”

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Chairman of the committee, Bassey Ekpenyong, expressed dissatisfaction with the slow pace of regulatory action. He lamented that supporting regulations approved as far back as 2003 were still not fully implemented, despite the urgency highlighted by the PIA.

“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,” Mr Ekpenyong said.