From declared asset retirement obligations to a decommissioning cost estimate for onshore crude oil fields in Nigeria

- A methodology to calculate cost of decommissioning is presented.
- The method uses declared cost of Asset Retirement Obligation in financial reports.
- Financial reports are available to the public, overcoming confidentiality barriers.
- Cost of decommissioning for onshore fields in Nigeria was determined.

As in most mature crude oil producing regions, asset divestment has commenced in Nigeria. Decommissioning and associated environmental liabilities are expected to become important problems requiring attention. Public and government engagement on decommissioning will be ineffective without information on cost of decommissioning liabilities, which are held confidential by oil companies. This study demonstrates a method to determine generic aggregate cost of decommissioning liabilities for Nigeria onshore fields, using non-proprietary data from annual financial reports of operating companies in Nigeria. The results can be used as basis for negotiation with operators and to help government in preparation for decommissioning risk.

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