Library / Midstream and Downstream Decommissioning and Abandonment Regulations Under Section 232 and 233 of the Petroleum Industry Act (2021). DRAFT DATE: 10/06/2022

Midstream and Downstream Decommissioning and Abandonment Regulations Under Section 232 and 233 of the Petroleum Industry Act (2021). DRAFT DATE: 10/06/2022

Page 10 of 13

Open the PDF at page 10

(2) The database pursuant to Regulation 24(1) shall be a public document and shall be 
published in the Authority’s website. 
 
(3) The database shall be subject to annual review and update by the Authority. 
 
(3) For the purposes of keeping, maintaining, reviewing and updating of the database 
pursuant to these Regulations, a licencee shall submit to the Authority in a format prescribed 
by the Authority and within the time specified, information relating to its Midstream and 
Downstream petroleum operations installations, structures, and pipelines. 
 
(4) In addition to the requirement to make the database under these Regulations public by 
publishing it on its website, the Authority may issue annual publications of the database to 
the public. 
 
 
Requirements for establishing a decommissioning and abandonment fund for 
midstream and downstream petroleum operations under licence  
 
25.(1) There shall be established for each licence (where a facility requires decommissioning 
and abandonment) a decommissioning and abandonment fund (Fund), not later than three 
(3) months from the date of commencement of operations in the case of a new licence, or 
one year from the effective date of these Regulations for existing licences in midstream and 
downstream petroleum operations.  
 
(2) The Fund shall be established by the licencee in respect of petroleum operations under 
the licence, for the purpose of fulfilling its obligations and liabilities with respect to 
decommissioning and abandonment pursuant to a decommissioning and abandonment plan. 
 
(3) A licencee shall notify the Authority in writing of the establishment of the Fund pursuant 
to Regulation 25 (1) not later than Fourteen (14) days from the date of establishment of the 
fund. 
 
(4) The Fund shall be in the form of an escrow account held by a financial institution that is 
not an affiliate of the licencee. 
 
(5) The Authority shall be a party to the escrow agreement in respect of the escrow account 
in Regulation 25 (4) and shall have access to the funds in the escrow account pursuant to the 
provisions of this regulation. 
 
(6) The escrow account shall be kept free of any encumbrances from creditors, including but 
not limited to a charge, pledge, guarantee, a letter of credit etc. 
 
(7) The financial institution pursuant to Regulation 25 (4) shall be a reputable commercial 
bank licenced by the Central Bank of Nigeria and shall pass stress tests conducted by the 
Central Bank of Nigeria on a semi-annual basis for the entire life of the decommissioning and 
abandonment escrow. Where the financial institution fails to meet the stress test, the funds 
in the escrow account shall be transferred within three (3) months to an escrow account in 
another financial institution that meets the stress test. 
 
(8) The escrow account shall be interest-bearing with any accrued interest being part of the 
fund. 
 
(9) The revocation or cancellation of a licence shall terminate the licencee’s interests, rights 
and access to the escrow account and Authority shall have sole and exclusive access and 
control over the escrow account to the exclusion of any other person.