…says the new agency will scare investors
The Ministry of Petroleum Resources, Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and Nigerian National Petroleum Company Limited (NNPC Limited) have jointly opposed the Bill to Establish the National Commission for Decommissioning of Oil and Gas Installations (NC-DOGI), 2024.
This position was expressed at a public hearing organized by the House of Representatives Committee on Petroleum Resources (Upstream).
Chairman of the House Committee on Petroleum Resources (Upstream), Alhassan Addo Doguwa, said the bill was conceived to address local environmental issues and challenges within oil producing communities.
However, Minister of State for Petroleum Resources (Oil) Heineken Lokpobiri in his presentation said that contrary to the perceptions of lawmakers, creating a commission for decommissioning and abandonment will not address any community issues as these are already being addressed by the host Community Development Trust Fund (HCDT).
Lokpobiri in a statement issued by the Head of Corporate Communications and Media, NUPRC, Eniola Akinkuotu, said Nigeria is registering new Final Investment Decisions (FIDs) and witnessing renewed activities in upstream, midstream and downstream operations, growth which had been stagnant for over a decade before the current administration.
Therefore he said that the creation of NC-DOGI risks scaring off investors.
The Minister also emphasized that creating a new agency to handle decommissioning and abandonment will reiterate the responsibility already vested in the NUPRC provided by Sections 232 and 233 of the Petroleum Industry Act (PIA) 2021.
He advised the committee to withdraw the bill saying that a predictable and stable legal framework attracts investors.
NUPRC Chief Executive (CCE) of the Commission, Gbenga Komolafe, in his presentation said creating a separate commission to handle decommissioning and abandonment is not in line with global best practices, where decommissioning and abandonment is domiciled with the upstream regulator.
Komolafe stressed that the issue of decommissioning is not an isolated matter and will require a separate regulator to deal with the Field Development Plan (FDP) and a separate agency to deal with decommissioning and abandonment.
“This will deprive NUPRC of full oversight of the FDP as decommissioning and abatement are an integral part of any FDP and will jeopardize the intended objective of the development plan.” He said.
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Komolafe said that between 2014 and 2021, capital expenditure for oil and gas investments declined by about 75 percent due to the lack of a stable legal and regulatory framework until the emergence of the PIA.
“Nigeria has now established the PIA, tampering with it will send a wrong signal to the international community that we have again started creating an unstable framework which will be disincentive to investment,” he said.
Also speaking, the Executive Vice President, Upstream of NNPC, Udobong Ntiya, said decommissioning and abandonment is not a routine exercise but an activity that happens at the end of life of a field which can take years.
“What will such a commission do when for example, there will be no decommissioning and abandonment at NNPC until 2045?” He asked question.
