The Effect of Cash Call on Decommissioning of Floating Production Storage and Offloading in Nigeria's Oil and Gas Industry

Floating Production Storage and Offloading (FPSO) units are crucial in Nigeria’s offshore oil and gas production. However, their decommissioning presents significant financial, regulatory, and environmental challenges, particularly in the context of Nigeria’s cash call funding mechanism. This study examines the impact of cash call obligations on the timely and efficient decommissioning of FPSOs in Nigeria’s oil and gas industry. Cash calls are financial commitments from the Nigerian National Petroleum Corporation (NNPC) and its Joint Venture (JV) partners to fund oil and gas operations. Due to historical delays and shortfalls in cash call payments, critical projects, including decommissioning activities, often experience financing gaps. This paper explores how these delays hinder the execution of decommissioning plans, leading to increased environmental risks, operational hazards, and prolonged financial liabilities for oil operators. Additionally, it assesses the regulatory framework governing decommissioning, highlighting gaps that exacerbate funding challenges. The study adopts a qualitative and quantitative approach, utilizing case studies, financial reports, and industry expert insights to analyze the implications of cash call inefficiencies on FPSO decommissioning. Comparative analysis with other oil-producing nations provides insights into alternative funding models, such as decommissioning trust funds and public-private financing strategies. Findings suggest that cash call constraints significantly impact decommissioning timelines, increasing operational risks and regulatory non-compliance. The study recommends policy reforms, including adopting dedicated decommissioning funds, improved fiscal planning, and strengthened regulatory enforcement to ensure timely and sustainable decommissioning practices. Addressing these challenges is critical for environmental sustainability, operational efficiency, and long-term industry viability