…says new agency will scare off investors
The Ministry of Petroleum Resources, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and the Nigerian National Petroleum Company Limited (NNPC Ltd) have jointly opposed the bill to establish the National Commission for the Decommissioning of Oil and Gas Installations (NC-DOGI), 2024.
The position was delivered at a public hearing organised by the House of Representatives Committee on Petroleum Resources (Upstream).
Alhassan Ado Doguwa, chairman, House Committee on Petroleum Resources, (Upstream), had said the bill was conceived to address local environmental issues and challenges within oil producing communities.
However, Heineken Lokpobiri, minister of State for Petroleum Resources (oil) in his submission, said contrary to assumptions by the lawmakers, creating a Commission for decommissioning and abandonment would not address any community issues as this was already being taken care of by the Host Community Development Trust Fund (HCDT).
Lokpobiri in a statement issued by Eniola Akinkuotu, head of Corporate Communications and Media, NUPRC, noted that Nigeria has been recording new Final Investment Decisions (FIDs) and witnessing renewed activities in upstream, midstream, and downstream operations, developments that were stagnant for over a decade before the current administration.
He therefore said the creation of the NC-DOGI risked scaring away investors.
The minister also stressed that creating a new agency to handle decommissioning and abandonment will duplicate the responsibility already vested in the NUPRC as provided by Sections 232 and 233 of the Petroleum Industry Act (PIA) 2021.
He advised the Committee to step down the bill, citing that a predictable and stable legal framework attracts investors.
In his presentation, Gbenga Komolafe, Commission Chief Executive (CCE) of the NUPRC said creating a different Commission to handle decommissioning and abandonment is not in alignment with global best practices, where decommissioning and abandonment is domiciled with the upstream regulator.
Komolafe stressed that the issue of decommissioning is not a stand-alone affair and would lead to having a separate regulator dealing with Field Development Plan (FDP) and a different agency handling decommissioning and abandonment.
“This will make the NUPRC not to have full line of sight on the FDP as Decommissioning and abonnement is an integral part of any FDP and will jeopardise the intended objective of the development plan.” he said.
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Komolafe noted that between 2014 to 2021, capital expenditure for oil and gas investment 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 put in place the PIA, tinkering with it will send wrong signals to the international community that we have again started to create an unstable framework which will be a disincentive to the investments,” he added.
Also speaking, Udobong Ntia, Executive Vice-President, Upstream of the NNPC, noted that decommissioning and abandonment are not a regular exercise but an activity that takes place at the end of the life of a field which could take years.
“What will such a commission be doing when the NNPC, for instance, has no decommissioning and abandonment until 2045?” he questioned.
