– Warn of investor flight
Mkpoikana Udoma
Port Harcourt — The Ministry of Petroleum Resources, the Nigerian Upstream Petroleum Regulatory Commission, NUPRC, and the Nigerian National Petroleum Company Limited, NNPCL, have jointly opposed the bill seeking to establish the National Commission for the Decommissioning of Oil and Gas Installations, NC-DOGI, warning that the move could create duplication of functions, disrupt regulatory stability, and scare away investors.
The three key petroleum institutions stated their positions at a public hearing organised by the House of Representatives Committee on Petroleum Resources (Upstream) in Abuja.
Delivering the Ministry’s position, the Minister of State for Petroleum Resources (Oil), Dr. Heineken Lokpobiri, said the proposed NC-DOGI would neither solve community-related problems nor fill any institutional gap already addressed by existing laws.
“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, which has generated nearly N400bn for community development projects,” Dr. Lokpobiri said.
He noted that Nigeria has been recording renewed investor confidence since the implementation of the Petroleum Industry Act 2021, adding that the country had begun witnessing new Final Investment Decisions and revitalized activity across the upstream, midstream, and downstream sectors.
“The creation of the NC-DOGI risks scaring away investors,” the minister warned.
Lokpobiri further cautioned that establishing a new commission would amount to duplicating responsibilities already assigned to the NUPRC under Sections 232 and 233 of the PIA, which clearly define the Commission’s role in decommissioning and abandonment of oil and gas installations.
He advised the lawmakers to step down the bill, noting that “a predictable and stable legal framework attracts investors.”
Backing the minister’s position, the Commission Chief Executive of NUPRC, Engr. Gbenga Komolafe, said the bill was inconsistent with global best practices, explaining that in every major oil-producing country, decommissioning and abandonment are functions of the upstream regulator.
“The issue of decommissioning is not a stand-alone affair and would lead to having a separate regulator dealing with Field Development Plan and a different agency handling decommissioning and abandonment,” Komolafe said.
“This will make the NUPRC not to have full line of sight on the FDP as decommissioning and abandonment is an integral part of any FDP and will jeopardise the intended objective of the development plan.”
The NUPRC boss reminded the lawmakers that between 2014 and 2021, capital expenditure for oil and gas investment declined by about 75% due to regulatory instability before the enactment 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 investments,” he cautioned.
Also speaking, the Executive Vice-President, Upstream, NNPC Limited, Mr. Udobong Ntia, aligned with the ministry and the NUPRC’s stance, emphasizing that the proposed agency was unnecessary.
“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,” Ntia said. “What will such a commission be doing when the NNPC, for instance, has no decommissioning and abandonment until 2045?”
He wondered what the proposed NC-DOGI would be doing in the interim, stressing that such a structure would only add to bureaucratic inefficiency.
Earlier, the Chairman of the House Committee on Petroleum Resources (Upstream), Hon. Alhassan Ado Doguwa, said the bill was conceived to address environmental issues in oil-producing communities in the Niger Delta.
This article was originally posted at sweetcrudereports.com
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