We will be looking at requirements for a decommissioning and abandonment plan, application and approval for plan and programme, enforcement and recovery.
INTRODUCTION
The NMDPRA said the Midstream and Downstream Decommissioning and Abandonment Regulation 2023, outlines the requirements and procedures for the decommissioning and abandonment of petroleum facilities in the midstream and downstream sector.
A major challenge in the Niger Delta, is that many of the oil and gas assets sold to Nigerians mostly by the International Oil Companies (IOCs) were rarely decommissioned, a development that clearly breached existing laws regulating the industry. Decommissioning is the cessation of operations at an oil and gas platform and returning the seafloor to its pre-production state for installations and any relevant structures that have come to the end of their productive life.
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Requirements for a decommissioning and abandonment plan:
- Midstream and downstream petroleum decommissioning and abandonment operations shall be conducted in accordance with a decommissioning and abandonment Plan (“Plan”) approved by the Authority in compliance with these Regulations and the Act.
- The requirement for a Plan shall apply to midstream and downstream petroleum operations whether or not a Plan was previously approved by any approving authority before the commencement of the Act.
- A licensee of an existing midstream or downstream petroleum facility shall, within 120 days of the commencement of these Regulations, submit to the Authority a Plan made in accordance with these Regulations.
- A person intending to construct a midstream or downstream petroleum facility shall, as part of its application, submit to the Authority a Plan in accordance with these Regulations.
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The objectives of these Regulations are to:
- set out the general rules for the establishment of Decommissioning and Abandonment Fund (Fund) for midstream and downstream petroleum operations;
- regulate the decommissioning and abandonment activities of facilities in the Nigerian midstream and downstream petroleum industry;
- provide requirements for administration of the Fund; and
- provide sanctions and penalties for failure to comply with these Regulations.
These Regulations shall apply to the:
- Establishment and administration of the Fund; and
- Decommissioning and abandonment of facilities used in midstream and downstream petroleum operations in Nigeria.
- A facility undertaking midstream petroleum operations shall contribute to the Fund.
- The Authority may by notice designate a downstream facility which shall contribute to the Fund
Application And Approval for Plan and Programme
- A Plan shall contain a decommissioning and abandonment philosophy that reflects economic, social and environmental sustainability.
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- A Plan approved by the Authority shall, from the effective date of the grant of approval, govern any decommissioning and abandonment programme or activity relating to the petroleum operations to which the Plan relates.
- A licensee shall prior to the implementation of the Programme, obtain the approval of the Authority to decommission and abandon any midstream and downstream facility.
- A licensee shall make an application to the Authority for the approval to decommission and abandon any midstream or downstream petroleum facility or infrastructure on land at least 24 months before the date of the Programme.
The application Form prescribed by the Authority comprise of:
- The location of the facility
- The part of the facility
- An executive summary
- Background information, supported by diagrams, schematics and
- Relevant photographs
- Description of items to be decommissioned and abandoned, inclusive of diagrams
- Removal and disposal methods
- An environmental evaluation study report, supporting the chosen decommissioning and abandonment
- A comparative assessment of alternative decommissioning and abandonment options
- Proposals covering the post-decommissioning and abandonment phase
- Analysis indicating that the proposal complies with the standards prescribed by the international maritime organisation on offshore petroleum installations and structure.
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Enforcement And Recovery
The Authority shall enforce compliance to the provisions of these Regulations in the following ways:
- Where a licence has expired, is surrendered, or terminated and no the Authority shall require the former licensee to execute the decommissioning and abandonment in accordance with the previously approved Plan decommissioning and abandonment has been executed by the licensee
- where a licence has been assigned or transferred by the licensee prior to the execution of any decommissioning and abandonment obligation provided for in a Plan, the obligation to execute the Plan relating to the licence shall be enforced against the transferee of the licence
Enforcement by the Authority:
- The Authority, where it revokes a licence, may —
- Impose restrictions on the disposal of the facility; or
- Direct in writing that the licensee refrain from conducting as pecific Programme regarding the facility
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- The former licensee under subregulation (1) shall, deliver the facility, in the present condition, to the third party designated by the Authority, and the licensee shall be relieved of any future obligation relating to decommissioning and abandonment of such facility.
- The Authority shall, notwithstanding the provision of subregulation(2), take necessary action to recover from the former licensee any shortfall in contribution to the Fund where there is no designated third party and the licensee’s contribution is not sufficient to cover the cost of the Programme.