FG plans to revoke unused oil licenses

The Federal Government has suggested plans to cancel most licenses granted to marginal oilfield operators that have remained inoperative.

The CEO of the Nigerian Upstream Petroleum Regulatory Commission, Gbenga Komolafe, told Reuters on Monday, December 4, that only companies with viable technical and financial support would be able to maintain their leases.

“Based on the PIA (Petroleum Industry Act), the commission is focused on adding value to the nation so that only companies that are technically and financially viable will maintain their leases,” Komolafe said.

Komolafe said the commission would initiate reviews of these leases and that the granting of new leases would be “subject to specific terms and conditions”.

According to the latest NUPRC data, although around 53 exploration leases have been issued since 2003 to date; More than 60 percent of prospecting licenses issued to local and foreign oil companies had expired.

Of the 53 licenses, 33 have expired and have not been renewed, including four that are held up due to contract disputes. Leases have not been automatically revoked, but the regulator is no longer willing to allow companies to maintain leases indefinitely.

The PIA enacted in 2021 authorized the regulator to review the technical and financial capabilities of companies holding oil exploration leases.

Investments in oil exploration in the country have been few and far between, as large oil companies abandon assets on land and in shallow waters due to growing insecurity and sabotage of oil infrastructure and legal disputes with communities in the Niger Delta.

Source: www.lindaikejisblog.com