AN APPRAISAL OF THE INSTITUTIONAL FRAMEWORK ON DECOMMISIONING OF PETROLEUM INSTALLATIONS IN NIGERIA

Abstract

It is a fact that the operating life of oil and gas fields is a limited one, and when a field reaches the end of its operational life, a plan must be in place to have it plugged and to have its disused operations – to some extent or other – removed. This process is known as decommissioning. It has been observed that ‘to date, decommissioning has been comparatively infrequent’. This trend is however set to be markedly reversed over the next few decades as a number of fields reach the end of their viable production lives. Given the extensive costs involved and the potential impact on such costs by a wide spectrum of variables – some predictable and controllable, others not – it comes as no surprise that companies in the oil and gas sector are voluntarily seeking to more systematically and comprehensively manage the full cycle of their operations. It is on the basis of the above that the aim of this article is to examine the institutional frameworks in Nigeria that regulates issues relating to decommissioning of oil installations. The objective of this article is to appraise the effectiveness or otherwise of the institutional regime put in place in Nigeria with respect to decommissioning. The doctrinal research methodology was adopted in this paper as the primary and secondary sources of law were relied upon. This paper found that though a robust regulatory regime is in place in Nigeria, but poor funding and technical expertise has hindered them from living up to expectations. This paper recommended amongst others that a special agency saddled with decommissioning should be created in Nigeria.