Library / Page 1 of 67 MIDSTREAM AND DOWNSTREAM PETROLEUM SAFETY AND ENVIRONMENTAL REGULATIONS, 2025
Page 1 of 67 MIDSTREAM AND DOWNSTREAM PETROLEUM SAFETY AND ENVIRONMENTAL REGULATIONS, 2025

Page 51 of 67
Page 51 of 67 
 
(2) Where the holder of a petroleum prospecting licence or petroleum mining lease divests its licence 
or lease in accordance with the Act and retains its midstream facilities, it shall —  
(a) notify the Authority of the divestment; and  
(b) not later than three months from the conclusion of the divestment establish submit a 
Decommissioning and Abandonment Plan and establish a Decommissioning and 
Abandonment Fund for the midstream designated facilities in accordance with these 
Regulations. 
105. (1) The Fund shall be funded by the licensee based on the annual contributions to be calculated 
in the manner provided in these Regulations and contained in the Plan. 
(2) The annual contribution provided for in the Plan shall be —11  
(a) in USD for a midstream facility and Naira equivalent for a downstream facility; 
and  
(b) based on an estimate by the licensee of the applicable decommissioning and 
abandonment costs, projected forward on a nominal basis, and divided by the 
estimated life of the facilities and the reasonable cost estimate shall be approved 
by the Authority. 
(3) The estimated life of the facilities referred to in sub-regulation (2) shall be based on the –  
(a) estimated design life of facilities used for midstream and downstream petroleum 
operations; and 
(b) period for which the safe operations of the facilities were designed, in case of 
facilities used for midstream and downstream petroleum operations. 
(4) The estimates for costs required in these Regulations shall be made based on international 
petroleum industry best practice. 
(5) The annual contribution shall be deposited to the Fund on or before 31st December of each 
calendar year.  
(6) The estimated annual contribution under sub-regulation (2) shall be reviewed every five years 
following the first submission or as required during the period of the licence or until the 
cessation of petroleum operations to which the Plan relates. 
(7) Contributions to the Fund shall be eligible for cost recovery and shall be tax deductible, 
provided that the cost of executing the Programme disbursed from the Fund shall not be 
eligible for cost recovery or deductible for tax purposes.  
 
Contributions to the Fund 
 
106. (1) The Fund shall be exclusively used to pay for decommissioning and abandonment costs. 
(2) A licensee shall have access to the Fund only on receipt of the written approval from the 
Authority under these Regulations to undertake the Programme and shall use such funds 
only for conducting approved Plan.  
Utilisation of the Fund