Regulatory standards for the decommissioning of oil and gas installations in Nigeria: A cross-national case study
Regulatory standards for the decommissioning of oil and gas installations in Nigeria: A cross-national case study
Keywords:
Decommissioning, Ghana, Nigeria, Oil and Gas Installations, United KingdomAbstract
Petroleum assets decommissioning is ineluctable once the oilfield reaches the end of its operational lifespan, as extending or replacing the infrastructure may no longer be technically or commercially sustainable. In Nigeria, most studies on decommissioning focus mainly on comparing Nigeria’s frameworks with those of developed petroleum-producing countries, overlooking lessons from developing oil-rich nations. To address the gap, the paper examines Nigeria’s decommissioning regulatory framework and implementation challenges via a comparative analysis with the United Kingdom (UK) and Ghana to identify lessons that Nigeria can draw from the comparator countries. The UK was selected for its widespread decommissioning experience and robust regulatory regime, while Ghana, a developing hydrocarbon-producing country, currently executing decommissioning operations of its Saltpond oilfield, provides practical insights for Nigeria, which has yet to start any decommissioning activities. Utilising a doctrinal legal research method, the article examines conventions, statutes, case laws, and relevant literature. Findings disclosed that though the Petroleum Industry Act (PIA) 2021 and its regulations align with international standards, considerable regulatory and institutional gaps impede effective implementation. Challenges include undue ministerial discretion, weak enforcement, limited technical capability, and possible fiscal risk linked to unstable financial institutions managing decommissioning funds. Comparatively, the UK exemplifies a strong regulatory and practical model, while Ghana accentuates the importance of early and proactive decommissioning planning. The article concludes that Nigeria can reinforce its decommissioning governance, mitigate environmental concerns, and improve socio-economic gains through effective implementation of extant laws, embracing global excellent practices, and drawing lessons from both the UK and Ghana.
Downloads
References
Adedayo AM, ‘Environmental Risk and Decommissioning of Offshore Oil Platforms in Nigeria’ (2011) NIALS Journal of Environmental Law 1.
Afonja T, R Payne, and R Oye, ‘Nigeria’ in EG Pereira and others (eds) The Regulations of Decommissioning, Abandonment and Reuse Initiatives in the Oil and Gas Industry: From Obligation to Opportunities (Kluwer Law International 2020).
Akenbor CO and TO Imo, ‘Decommissioning Costs in Oil and Gas Operations in Nigeria: Theoretical Reflections’ (2022) 17(2) Nigeria Academy of Management Journal 30, 31.
Akpambang EM, OO Omoniyi and MI Akpambang, ‘Assessing the Impact of International and Regional Legal Frameworks on Petroleum Assets Decommissioning Legislation in Nigeria’ (2026) 17(1) The Journal of Sustainable Development Law and Policy, 206, 210-211 <https://doi.org/10.4314/jsdlp.v17i1.8>.
Anyatang BFI and BE Kooffreh, ‘Abandonment/Decommissioning under Nigerian Legal Regimes: A Comparative Analysis’ (2021) 23(2) Environmental Law Review 110 <https://doi.org/10.1177/14614529211006074>.
Ayetey JS and BT Erinosho, ‘International Law in Ghana: A Study of the Attitudes, Knowledge and Use of International Law by Judges and Lawyers’ (2023) 31(2) African Journal of International and Comparative Law 253-274 <https://doi.org/10.3366/ajicl.2023.0446>.
Ayodele-Akaakar FO, ‘Appraising the Oil & Gas Laws: A Search for Enduring Legislation for the Nigeria Delta Region’ (2001) 3(2) Journal of Sustainable Development in Africa 1, 2.
Azaino EU, ‘International Decommissioning Obligations: Are There Lessons Nigeria Can Acquire from UK’s Legal and Regulatory Framework?’ <https://www.academic.edu/3834331/International_Decommissioing-Obligation_Are_there_lessons_Nigeria_can_acquire_from_the_UK_s_legal_and_regulatory_framework>, accessed 5 February 2025.
Azubuike PI, ‘An Appraisal of Sustainable Decommissioning of Petroleum Installations and Environmental Protection in Nigeria’ (2022) 4(3) International Review of Law and Jurisprudence 140, 142.
Beckman, ‘Global Legal Regime on the Decommissioning of Offshore Installations and Structure’ in MH Nordquist and others (eds), The Regulation of Continental Shelf Development: Rethinking International Standards (Martinus Nijhoff Publishers 2013).
Capobianco N and others, ‘Toward a Sustainable Decommissioning of Offshore Platforms in the Oil and Gas Industry: A PESTLE Analysis’ (2021) 13 Sustainability 1, 2 <https://doi.org/10.3390/su13116266>.
Chime V, ‘UN Experts Accuse Top Oil Firms of Rights Violations Over Nigerian Assets Sales’ Energy, Justice News (2 September 2025), https://www.climatechangenews.com/2025/09/02/un-experts-accuse-top-oil-firms-of-rights-violations-over-nigerian-asset-sales , accessed 4 September 2025.
Dzah GEK, ‘Transcending Dualism: Deconstructing Colonial Vestiges in Ghana’s Treaty Law and Practice’ in M Addaney, MG Nyarko, and E Boshoff (eds) Governance, Human Rights, and Political Transformation in Africa (Palgrave Macmillan, Cham 2020) <https://doi.org/10.1007/978-3-030-27049-0_6 >.
Ekhator EO and G Agbaitoro, ‘Energy Law and Policy in Nigeria with Reflection on the International Energy Charter and Domestication of the African Charter’ in R Adeola & AO Jegede (eds), Governance in Nigeria Post-1999: Revisiting the Democratic ‘New Dawn’ of the Fourth Republic (Pretoria University Law Press 2019).
Ekhator EO, ‘Public Regulation of the Oil and Gas Industry in Nigeria: An Evaluation’ (2016) 21(1) Annual Survey of International & Comparative Law 43, 89-90.
Etikerentse G, Nigerian Petroleum Law (2nd edn, Dredew Publishers 2004).
Fadare SO, ‘Banking Sector Liquidly and Financial Crisis in Nigeria’ (2011) 3(5) International Journal of Economics and Finance 1 <https://doi.org/10.5539/ijef.v3n5p3>.
Fam ML and others, ‘A Review of Offshore Decommissioning Regulations in Five Countries-Strengths and Weaknesses’ (2018) 160 Ocean Engineering 244, 245-246.
Gao Z, ‘Current Issues of International Law on Offshore Abandonment, with Special Reference to the United Kingdom’ (1997) 28(1) Ocean Development and International Law 59-78 <https://doi.org/10.1080/00908329709546095>.
Gayle D, ‘Nigerian King Faces Shell in London High Court over Decades of Oil Spills’ The Guardian (London, 7 March 2025) https://www.theguardian.com/world/2025/mar/07/nigerian-king-faces-shell-london-high-court-decades-oil-spills , accessed 5 September 2025.
Greenpeace International, ‘Greenpeace Activists Board Shell Oil Rigs in Protest Against Plans to Leave Behind Oil in the North-Sea’ < https://www.greenpeace.org/international/press-release/248226/greenpeace-activists-board-shell-oil-rigs-in-protest-against-plans-to-leave-behind-oil-in-the-north-sea/> accessed 1 February 2025.
Griffin WS, ‘Evolution of the Global Decommissioning Regulatory Regime,’ (1999) 14(2) SPE Production & Facilities 83, 85-87 .
Hall R, E. Topham, and E. Joao, ‘Environmental Impact Assessment for the Decommissioning of Offshore Wind Farms’ (2022) 165 Renewable and Sustainable Energy Reviews 112580 <https://doi.org/10.1016/j.rser.2022.112580>.
Hamzah BA, ‘International Rules on Decommissioning of Offshore Installations: Some Observation’ (2003) 27(4) Marine Policy 339, 340-342 <https://doi.org/10.1016/S0308-597X(03)00040-X>.
Heffron RJ and others, ‘A Treatise for Energy Law’ (2018) 11 Journal of World Energy Law and Business 34, 40< https://doi.org/10.1093/jwelb/jwx039>.
Igiehon MO, ‘Decommissioning of Upstream Oil and Gas Facilities,’ in R Younes (ed) Oil and Gas: A Practical Handbook (3rd edn, Globe Law and Business Ltd 2018).
Jordan A and T Jeppesen, ‘EU Environmental Policy: Adapting to the Principle of Subsidiarity?’ (2000) 10(2) European Environment 64, 69-71 <https://doi.org/10.1002/SICI)1099-0976(200003/04)10:2<64::AID-EET2193.0.CO;2-Z)>.
Kama U, ‘Banking Sector Crisis and Resolution Options in Nigeria’ (2010) 34(1) Bullion 7.
Kasoulides GC, ‘Removal of Offshore Platforms and the Development of International Standards’ (1989) 13(3) Marine Policy 249, 252-255< https://doi.org/10.1016/0308-597X(89)90058-4>.
Khalidov I and others, ‘Decommissioning of Oil and Gas Assets: Industrial and Environmental Security Management, International Experience and Russian Practice’ (2021) 7(7) Heliyon e07646 <https://doi.org/10.1016/j.heliyon.2021.e07646>.
Kirk EA, C Warbrick, and D McGoldrick, ‘OSPAR Decision 98/3 and the Dumping of Offshore Installations’ (1999) 48(2) The International and Comparative Law Quarterly 458, 460 <https://doi.org/10.10.17/S0020589300063302>.
Laville S, ‘Shell Must Clean up Pollution before it Leaves Niger Delta, Report Says’ The Guardian (London, 28 February 2024) https://www.theguardian.com/environment/2024/feb/28/shell-must-clean-up-pollution-before-it-leaves-niger-delta-report-says , accessed 5 September 2025.
Martin T, ‘Decommissioning of International Petroleum Facilities Evolving Standards & Key Issues,’ <https://timmartins.ca/wp-content/uploads/2016/02/Decommissioing-of-Int-Petroleum-Facilities-Martin2004.pdf>, accessed 1 February 2025.
McDade PV, ‘The Removal of Offshore Installations and Conflicting Treaty Obligations as a Result of the Emergence of the New Law of the Sea: A Case Study’ (1987) 24 San Diego Law Review 645, 656-659.
Mitchell C, ‘Nigeria’s Seplat Completes Acquisition of ExxonMobil Oil Assets’<https://www.spglobal.com/commodity-insights/en/news-research/latest-news/crude-oil/121224-nigerias-seplat-completes-acquisition-of-exxonmobil-oil-assets>, accessed 4 September 2025.
Mohammed AS, E Graham, and SK Dary, ‘Rising Expectations and Dying Hopes: Local Perceptions of Oil and Gas Extraction in Ghana’ (2022) 88 Energy Research & Social Science 102529 <https://doi.org/10.1016/j.erss.2022.10252>.
Munonye I, ‘An Appraisal of the Ogoni Remediation Exercise and the Paradigm Shift in Environmental Law’ (2022) 9(1) Rivers State University Journal of Public Law 1, 9.
Nigerian Upstream Petroleum Regulatory Commission, The Nigerian Upstream Petroleum Regulatory Commission 2024 Annual Report, 1, 31 <https://www.nuprc.gov.ng/wp-content/uploads/2025/04/UPDATED-NUPRC-2024-ANNUAL-REPORT-1.pdf>, accessed 5 September 2025.
North Sea Transition Authority, UKSC Decommissioning Cost and Performance Report 2023, <https://www.nstauthority.co.uk/news-publications/ukcs-decommissioning-cost-and-performance-report-2023>, accessed 4 September 2025.
Ogeer N, Economic Adviser-Oceans and Natural Resources Division, Common Wealth Secretariat, Oil and Gas Decommissioning Toolkit: Practical Guidance for Governments (The Commonwealth Secretariat 2022) <https://thecommonwealth.org/oil-and-gas-decommissioning-toolkit>, accessed on 5 February 2025.
Okebukola EO, ‘The Application of International Law in Nigeria and the Facade of Dualism’ (2020) 11 (1) Nnamdi Azikiwe University Journal of International Law and Jurisprudence 15, 17-18.
Okotie S, ‘The Nigerian Economy before the Discovery of Crude Oil’ in PE Ndimele (ed) The Political Ecology of Oil and Gas Activities in the Nigerian Aquatic Ecosystem (Academic Press 2018) <https://doi.org/10.1016/B978-0-12-809399-3.00005-7> .
Okumagba EO, ‘Decommissioning of Oil and Gas Installations in Nigeria: A Critical Appraisal of the Impacts of the Petroleum Act 2021’ (2022) 15(7) Baltic Journal of Law & Politics 1370, 1376 <https://doi.org/10.2478/bjlp-2022-007103>.
Olawuyi DS and Z Tubodenyefa, Review of the Environmental Guidelines and Standards for the Petroleum Industry in Nigeria (EGASPIN) (OGEES Institute, Afe Babalola University 2018).
Ole NC and EB Herbert, ‘The Nigerian Offshore Oil Risk Governance Regime: Does the Petroleum Industry Act 2021 Address the Existing Gaps?’ (2022) 31(3) Studia Iuridica Lublinensia 143, 144 <https://doi.org/ 10.17951/sil.2022.31.3.143-163>.
Ole NC, ‘Decommissioning and the Petroleum Industry Act 2021’ (2023) 11(1) AELN Journal of Environment & Natural Resources Law 101, 112-115.
Ole NC, ‘The Financial Securities for Decommissioning of Offshore Installations in Nigeria: A Review of the Legal and Contractual Regime’ (2017) 15(1) Oil, Gas & Energy Law Intelligence 1<https://www.researchgate.net/publications/315446032_The_Financial_Securities_for_Decommissioning_of_Offshore_Installations_in_Nugerua_A_Review_of_The_Legal_and_Contractual_Regime>, accessed on 5 February 2025.
Olukaejire SJ and others, ‘Petroleum Exploration in the Niger Delta Region and Implications for the Environment: A Review’ (2024) 16(5) Journal of Energy Research and Reviews 19, 23-26.
Omorogbe Y, Oil and Gas Law in Nigeria (Malthouse Law Books 2001).
Omotuyi OY, ‘A Critical Assessment of the Regulatory Framework for Oil and Gas Decommissioning in Nigeria’ (2023) 14(1) The Journal of Sustainable Development Law and Policy 140, 154-158.
Oudenot E and others, ‘Preparing for the Next Wave of Offshore Decommissioning,’ The Boston Consulting Group Inc., 2018 <https://web-assets.bcg.com/img-src/BCG-Preparing-for-the-Next-Wave-of-Offshore_decommissioning-Apr-2018-NL_tcm9-188833.pdf>, accessed 4 September 2025.
Oyewumi T, O. Ajayi and I. Ajayi, ‘International Oil and Gas Transactions and the Emerging Trend of Upstream Divestments and Acquisitions in Nigeria,’ < https://www.ogel.org/journal-advance-publication-article.asp?key=818>, accessed 5 February 2025.
Pereira EG, TO Taiwo, and NC Ole, ‘Addressing Residual Liability and Insolvency in Disused Oil and Gas Infrastructure Left in Place: The Cases of Brazil, Nigeria, and Trinidad and Tobago’ (2020) 11(2) The Journal of Sustainable Development Law and Policy 326, 345-346 <https://dx.doi.org/10.4314/jsdlp.v11i2.3>.
Rudiger Wolfrum and Nele Matz, Conflicts in International Environmental Law (Springer Verlag 2003).
Sami SSS and M Taiwo, ‘Effect of Crude Oil Prices and Production on the Performance of Nigerian Gross Domestic Product: A Conceptual Framework’ (2023) 11 Journal of Human Resources and Sustainability Studies 698, 699.
Shams S and others, ‘An Assessment of Environmental Impact on Offshore Decommissioning of Oil and Gas Pipelines’ (2023) 10 Environment 104 <https://doi.org/10.3390/environments10060104>.
Spielmann V and others, ‘Decommissioning of Offshore Wind Farms and its Impact on Benthic Ecology’ (2023) 347 Journal of Environmental Management 119022 <https://doi.org/10.1016/j.jenvman.2023.119022>.
Stakeholder Democracy Network (SDN), White Paper on Sustainable Closure and Decommissioning of Oil and Gas Assets in Nigeria (SDN 2015) 4-5, <https://www.stakeholderdemocracy.org/wp-content/uploads/2016/06/Sustainable-Closure-and-Decommissioning-of-Oil-and-Gas-Assets-in-Nigeria.pdf>, accessed 5 February 2025.
Stephen TK and T Acheampong, ‘Funding Decommissioning in Emerging Petroleum Producing Countries: Ghana’s Experience with Decommissioning Costs and Guarantees,’ <https://aura.abdn.ac.uk/bitstream/2164/25020/1/Stephens_etAcheampong_JENRL_Funding_Decommissioning_in_Emerging_AAM.pdf>, accessed 6 February, 2025.
Stephens TK, ‘Sustainable Decommissioning in Ghana: Historical Developments, Current Practice and Challenges’ (2023) 14(1) The Journal of Sustainable Development Law and Policy 81, 87-91, 96 <https://doi.org/10.4314/jsdlp.v14i1.5s>.
Steyn P, ‘Oil Exploration in Colonial Nigeria, C.1903-1958’ (2009) 37(2) The Journal of Imperial and Commonwealth History 249-274, <https://doi.org/10.1080/03086530903010376> and <https://dspace.stir.ac.uk/handle/1893/2735?mode=full>, accessed 5 February 2025.
Tamuno PS, ‘Legal Response to Oil Pollution in the Maritime Environment: A Comparative Analysis of Nigeria, United Kingdom and the United States’ (2021) 9(1) ABUAD Law Journal 72, 79.
Techera EJ and John Chandler, ‘Offshore Installations, Decommissioning and Artificial Reefs: Do Current Legal Frameworks Best Serve the Marine Environment?’ (2015) 59 Marine Policy 53 <https://doi.org/10.1016/j.marpol.2015.04.021>.
Trevisanut S, ‘Decommissioning of Offshore Installations: A Fragmented and Ineffective International Regulatory Framework’ in C Banet (ed) The Law of the Seabed: Access, Uses, and Protection of Seabed Resources (Brill/Nijhoff 2020) 431< https://doi.org/10.1163/9789004391567_02>.
United Nations Environmental Programme, Environmental Assessment of Ogoniland (Nairobi, Kenya: United Nations Environmental Programme 2011).
Unwana U, ‘Examining the Legal Framework Guaranteeing Discharge of Decommissioning Liabilities by Insolvent Oil Companies in Nigeria: Lessons from Canada’s Regulatory Regime’ (2020) OGEL Energy Law Journal 4.
Watson SM and others, ‘Offshore Decommissioning Horizon Scan: Research Priorities to Support Decision-Making Activities for Oil and Gas Infrastructure’ (2023) 878 Science of the Total Environment 163015 <https://doi.org/10.1016/j.scitoenv.2023.163015>.
STATUTES
Constitution of the Federal Republic of Nigeria 1999 (as amended).
Convention for Co-operation in the Protection, Management and Development of the Marine and Costal Environment of the Atlantic Coast of West, Central and Southern African Region 1981.
Convention on the Prevention of Marine Pollution by Dumping of Wastes and Other Matters 1972.
Energy Act 2008 and 2016.
Environmental Guidelines and Standards for Petroleum Industry in Nigeria 2018.
