NUPRC Clears 94 Oilfield Decommissioning Plans Worth $4.42Bn
By NaijaEnquirer Staff
The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has approved 94 oilfield decommissioning and abandonment plans valued at $4.42 billion since April 2023, in line with provisions of the Petroleum Industry Act (PIA).
Financial Safeguards Under the PIA
Commission Chief Executive, Gbenga Komolafe, disclosed the figure at an industry forum in Lagos. He said that the obligations will be funded gradually over the life of the fields and deposited into escrow accounts, ensuring that decommissioning costs do not fall on the state. According to him, about $400 million has already been secured through letters of credit and escrow arrangements.
He added that a new framework on domiciling escrow accounts has been agreed with international oil companies (IOCs) and is currently awaiting approval by the Ministry of Justice.
Preventing Costly Liabilities
Speaking through a deputy at the NEITI Companies Forum, Komolafe explained that the rules are designed to prevent environmental and financial liabilities from being transferred to the government during asset divestments. He referenced global cases where decommissioning costs spiraled, including £27bn in the North Sea (by 2032), over $9bn in the Gulf of Mexico, and up to CAD70bn for inactive wells in Alberta.
“Without a robust and enforceable framework for abandonment and decommissioning, divestment transitions can create lasting financial and environmental burdens,” Komolafe warned. “Nigeria is not immune to this challenge, which is why we have taken bold steps under the PIA to safeguard the nation’s interests.”
Recent Divestments Under Stricter Rules
NUPRC’s framework has already shaped some of Nigeria’s biggest oil and gas divestments in recent years, requiring upfront financial guarantees from international operators. Major transactions include:
- TotalEnergies — In May 2025, agreed to sell its 12.5% non-operated stake in the Bonga field (OML 118) to Shell for $510mn (pending approvals).
- Shell Petroleum Development Company (SPDC) — Completed its $2.8bn exit from onshore operations in March 2025, selling to Renaissance Africa Energy.
- Equinor ASA — Exited Nigeria in December 2024, selling its assets, including Agbami (OML 128), to Chappal Energies.
- ExxonMobil (MPNU) — Closed a $1.28bn deal in December 2024, selling its shallow-water assets to Seplat Energy (now Seplat Energy Producing Nigeria Unlimited).
- Eni (NAOC) — Finalized the sale of its Nigerian Agip Oil Company to Oando Plc in August 2024, while retaining a 5% stake in the SPDC joint venture.
Strengthening Nigeria’s Oil and Gas Governance
The NUPRC maintains that these measures will protect Nigeria from the pitfalls seen in other oil-producing regions, while ensuring that energy transition policies and environmental obligations are not neglected during divestment processes.
