Introduction
Nigeria’s upstream petroleum sector is undergoing a period of significant transition. Over the past few years, the industry has witnessed a wave of divestments by international oil companies (“IOCs”), the emergence of indigenous operators as owners of upstream oil and gas assets, and an increased regulatory emphasis on environmental sustainability, asset integrity, and responsible resource management. While these developments have created significant investment opportunities, they have also brought renewed attention to an aspect of the upstream petroleum value chain that has historically received comparatively less scrutiny than exploration and production which is the legal, operational and financial consequences of decommissioning petroleum assets at the end of their economic life.
Inadequately planned or poorly executed decommissioning may give rise to significant environmental, financial and regulatory risks. Abandoned wells, ageing infrastructure, and inadequate environmental remediation may expose operators to substantial statutory and common law liabilities while increasing environmental and safety risks
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