On Thursday, 9th, October 2025, the Nigerian House of Representatives has initiated an investigation into the alleged non-compliance of oil and gas companies with regulations regarding the funding of decommissioning and abandonment (D&A) of oil assets, amidst concerns over a massive compliance gap estimated at between $15 billion and $20 billion.
This followed the presentation of a motion of urgent public importance by the Chairman, House Committee on Political Parties Matters, Mr Zakaria Nyampa, at Thursday’s plenary.
The motion addresses mounting fears over spikes in environmental, fiscal, and social risks associated with outdated infrastructure in the petroleum industry.
Showing the significance of the motion, a lawmaker representing Adamawa state, showed deep concern that over 90 per cent of operators have failed to meet their mandatory D&A funding obligations, a requirement meant to cover the future costs of dismantling old assets, site remediation, and restoration.
“This principle is clearly enshrined in Nigeria’s Petroleum Industry Act (PIA) 2021 and the NUPRC/NMDPRA Decommissioning and Abandonment Regulations of 2022, yet compliance remains alarmingly poor.”
He argued that section 232 and 233 of the PIA mandate licensees and lessees to establish decommissioning programmes, maintain dedicated escrow accounts, obtain regulatory approvals, and pay penalties for non-compliance.
“Across oil-producing countries, operators are required to set aside funds during the productive phase of their assets,” the lawmaker stated. “The process of safely dismantling oil and gas wells, platforms, and related facilities after their productive life is a critical environmental and economic responsibility that has been grossly neglected.”
Less Than $1 Billion Contributed
Despite the estimated total D&A liabilities in the upstream sector alone ranging from $10 billion to $15 billion, less than 20 per cent of operators have established properly funded escrow accounts, this was highlighted by the motion.
“The total amount contributed so far is below $1 billion, leaving a massive shortfall and compliance gap of about $15bn to $20bn across the industry,” the representative revealed, cautioning that a continued lack of enforcement by regulatory agencies like the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) signifies a “dangerous regulatory gap.”
The lawmaker further pointed out the risk that some International Oil Companies (IOCs) have divested from Niger Delta assets without adequate D&A funding, effectively transferring future environmental and financial liabilities onto the Nigerian government and host communities.
The House resolved to establish an ad-hoc committee to investigate the level of compliance with the D&A provisions of the Petroleum Industry Act (PIA) 2021.
The committee has been mandated to summon relevant regulatory agencies and all oil companies, scrutinize their D&A escrow accounts, and submit a report back to the House within twelve weeks for necessary legislative action. The move is expected to bring increased scrutiny to the environmental and financial practices of both local and international energy firms operating in Nigeria.
