The Legal Regime on Oil and Gas Wastes

Can Decommissioning of Petroleum Assets under the Petroleum Industry Act 2021 Combat Environmental Degradation Risk in Nigeria’s Upstream Petroleum Sector?

Abstract

Decommissioning of petroleum assets has been a global concern due to its adverse environmental risks occasioned by oil firms’ operations. This problem often occurs on land and deep seas which have become uncontrollable as international and municipal legal regimes are less effective as member states’ multinational oil firms or corporations often disregard the conventions on the treatment of disused oil and gas assets by abandoning their infrastructure upon the cessation of oil exploration and production activities. This has occasioned the pollution of the ecosystem. The paper embraces a conceptual legal approach utilising existing literature to aid a doctrinal library-based legal technique. The paper also utilises primary and secondary sources of laws. Also, a comparison of decommissioning of oil and gas installations in the United Kingdom, Norway, United States and Nigeria were done with the lessons Nigeria can learn to improve the laws on decommissioning. The paper finds that weak enforcement, absence of comprehensive law governing decommissioning of offshore oil and gas installations with no credible records yet of decommissioning requirements and structure that are due for decommissioning, their locations, seize and cost of decommissioning. However, section 231(1) of the new Petroleum Industry Act 2021 regulates petroleum decommissioning. Absence of specialised agency to oversee decommissioning with vital technical expertise to promote efficient environmental governance in Nigeria. The paper advocates overhauling of Nigeria's laws on decommissioning and strict compliance with best practices and other extant legal regimes. The study advocates stringent enforcement of Decommissioning and Abandonment Fund in section 233(1) of the Petroleum Industry Act 2021 to deter non-compliance with decommissioning obligation. Conclusively, the paper recommends scientific environmental decommissioning to restore petroleum sites to their natural state.