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 itsoperational life, a plan must be in place to have it plugged and to have its disused operations – to some extentor 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 overthe next few decades as a number of fields reach the end of their viable production lives. Given the extensivecosts involved and the potential impact on such costs by a wide spectrum of variables – some predictable andcontrollable, others not – it comes as no surprise that companies in the oil and gas sector are voluntarilyseeking to more systematically and comprehensively manage the full cycle of their operations. It is on the basisof the above that the aim of this article is to examine the institutional frameworks in Nigeria that regulatesissues relating to decommissioning of oil installations. The objective of this article is to appraise theeffectiveness 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 lawwere relied upon. This paper found that though a robust regulatory regime is in place in Nigeria, but poorfunding and technical expertise has hindered them from living up to expectations. This paper recommendedamongst others that a special agency saddled with decommissioning should be created in Nigeria.