From Exploration to Decommissioning: A Guide to Regulatory Compliance in Nigeria’s Oil and Gas Lifecycle

Abstract

This article offers a comprehensive overview of regulatory compliance across the full lifecycle of oil and gas operations in Nigeria from exploration through decommissioning. It reflects the state of Nigerian regulation in 2025, focusing on keylegal frameworks, institutional mandates, and compliance strategies at each lifecycle stage. The goal is to guide industry operators, legal practitioners, and regulators toward best practices that ensure safety, environmental protection, community welfare, and government oversight.

Introduction

Nigeria’s oil and gas sector remains a critical driver of its economy, contributing more than 80% of export revenues and nearly one-third of federal government income. However, the environmental and social impacts tied to hydrocarbon extraction and production have prompted enhanced regulatory scrutiny in recent years. As of 2025, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), Federal Ministry of Environment (FMEnv), Department of Petroleum Resources (DPR), and National Oil Spill Detection and Response Agency (NOSDRA) enforce a robust legal framework. These bodies aim to ensure operational excellence while protecting the Niger Delta ecosystem, human health, and local communities. This guide unpacks compliance requirements through five lifecycle stages: Exploration, Appraisal & Development, Production & Operations, Decommissioning, and Post‑decommissioning/Remediation.

1. EXPLORATION

1.1 Licenses and Approvals

Licensing under Petroleum Act & PIA 2021: Companies must secure exploration licenses or oil mining leases from the NUPRC. In 2025, the Petroleum Industry Act(PIA) 2021 is fully operational, introducing streamlined licensing procedures and online submission portals to reduce delays.

1.2 Environmental & Social Due Diligence

Environmental Impact Assessment (EIA): In accordance with the Environmental Impact Assessment Act, firms must commission EIAs, ideally including Strategic Environmental Assessments (SEAs), prior to onshore or nearshore seismic surveys.

Public Consultation and Host‑Community Participation: EIA processes must integrate Free, Prior and Informed Consent (FPIC) from impacted communities.

1.3 Risk Management

Well Integrity and Spill‑Prevention Planning: Operators must submit Oil Spill Contingency Plans (OSCPs) to NOSDRA and demonstrate well‑engineering controls consistent with ISO 29001 standards adopted by the NUPRC.

2. APPRAISAL & FIELD DEVELOPMENT

2.1 Appraisal Activities

Appraisal wells and extended reservoir testing require approval amendments; modifications to EIAs must be re‑submitted for review.

Data collection must observe community engagement protocols and use flaring‑minimization techniques.

2.2 Development Planning

Field Development Plan (FDP): Under PIA 2021, FDPs must be approved by the NUPRC and aligned with onshore/offshore environmental regulations. Social Impact Assessment (SIA): A mandatory, updated SIA is required to account for anticipated production‑induced community impacts.

2.3 Local Content Compliance

Nigeria Content Act Enforcement: In 2025, local sourcing rules require at least 60% services by Nigerian companies. Compliance reporting and certification from the Nigerian Content Development and Monitoring Board (NCDMB) are obligatory.

3. PRODUCTION & OPERATIONS

3.1 Operating Compliance

Environmental Permits & Renewals: Companies must maintain valid permits under FMEnv and NMDPRA for emissions, effluents, flaring, and gas‑utilization activities.

Production Reports & Royalty Payments: NUPRC mandates monthly volume reporting. Payment enforcement remains stringent, with electronic submittals via the Petroleum Revenue Management System (PRMS).

3.2 Health, Safety & Environment (HSE)

Management Systems: Insurance of compliance with HSE requirements, aligning with NUPRC–DPR guidelines, and ISO 45001 certification, is required.

Spill Response and Incident Tracking: Rapid incident reporting to NOSDRA, plus implementation of forensic oil‑fingerprinting techniques, have become standard.

3.3 Community Relations

Host‑Community Agreements (HCA): Companies must negotiate, register, and report HCA terms annually.

Conflict‑Prevention Mechanisms: Community grievance mechanisms and revenue‑sharing frameworks are closely monitored.

4. DECOMMISSIONING

4.1 Triggering Events

Triggered by end‑of‑economic‑life, field shut‑in, or regulatory directive. Operators must submit Notice of Intent six months prior and a Decommissioning Plan (DP) at least nine months before initiation.

4.2 Planning & Approval

Decommissioning Plan: Must detail risk‑based infrastructure removal, waste logistics, health impact studies, and anticipated costs. A financial assurance mechanism, via bonds or escrow, is required under PIA 2021.

Environmental Closure Certification: FMEnv issues closure permits after ensuring remediation measures meet national standards.

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