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New Compensation Systems and Mechanisms in the Oil and Gas Industry in Nigeria

This report, which presents research on ‘New Compensation Rates and Processes in Nigeria’, was facilitated by Stakeholder Democracy Network (SDN) with funding from the Dutch Ministry.

An expert team of researchers and valuers undertook the study to identify a fair and comprehensive ‘oil spill rates mechanism’ that captures the immediate and future loss of earnings due to oil spills, which are presented in this report. The aim of this research is to contribute to the transformation process of the currently inefficient and often counterproductive oil spill management and compensation system in Nigeria.

The current compensation assessment and payment mechanism in the oil and gas industry in Nigeria, which are largely dominated by civil courts and compensation payments, are increasingly being obtained through litigation and negotiation in preference to valuation.

The study highlights some of the practical challenges associated with the existing compensation regime. It identifies the unscientific and unprofessional assessment method in certain areas. The report calls for a new compensation code, which will be expected to cover all activities from the initial spill through its assessment for clean-up, compensation and remediated.

Read the full report

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