Photo caption: NUPRC logo
No fewer than 40 oil licences will expire in June 2025, and the companies holding these assets may lose them unless the Minister of Petroleum renews their licences in accordance with the Petroleum Industry Act.
According to the Nigerian Upstream Petroleum Regulatory Commission’s (NUPRC) Upstream Concession Situation Report in May, the various licences, which were granted to different companies on June 28, 2022, will expire on June 27, 2025.
They include petroleum prospecting licences granted to oil companies after the completion of the 2020 marginal fields bid round. The NUPRC said the law provides for an optional extension of three or five years, however, the extension will depend on the company’s performance.
Marginal fields are smaller oil blocks that have been developed but have remained unproductive for a period of over 10 years.
The Federal Government began the marginal field programme in the 90s to offer Nigerian indigenous oil and gas companies the opportunity to play a more active part in the exploration and production segment of the petroleum sector by owning and operating oil blocks.
The 2020 marginal bid round had successful bidders for the 57 marginal oil fields put up for lease by the government at that time.
Some of the companies that emerged as winners at the time included Matrix Energy, AA Rano, Ardova Plc, Duport Midstream, Genesis Technical, Twin Summit, Bono Energy, Deep Offshore Integrated, Odu’a Oil, MRS, and Petrogas.
Others were North Oils and Gas, Pierport, Metropole, Pioneer Global, Shepherd Hill, Akata, NIPCO, Aida, YY Connect, Accord Oil, Pathway Oil, Tempo Oil, and Virgin Forest, among others.
It was shown from the NUPRC data that the licence to operate the Emohua field of OML 22 by EOP Energy will expire next month. EOP Energy comprises Erebina Energy Resources Limited, Omega-Butter Marginal Fields Ltd, and Intessa Energy Ltd. In the same vein, Ardova Plc and Petrodev’s approval to operate the Olua field of OML 25 through Ardogreen Energy will expire at the same time.
Ingentia Energies Limited, made up of Suntrust Oil Company, Petrogas Energy, and Sonora GTP Ltd, may lose the Egbolom field of OML 23 without renewal. Unless renewed, Matrix Energy and Bono Energy Limited’s Atambia E&P will cease to be the operators of the Alamba field of OML 42, while Energia and Annajul Rosari will lose the Irigbo field in the same OML 42.
ENEROG Limited, comprising Energia and Sterov Consortium, may also lose its licence to produce oil from the Ugbo field of OML 40. It was reported that A. A. Rano and Acrete Petroleum’s licence to operate the Oloye field of OML 95 is also affected.
Similarly, Odu’a Investment Company and Pioneer Global Resource & Integrated Energy Ltd may cease to be the operators of the Bita oil field under OML 95 without the approval of the minister. Transit Oil’s Kudo field in OML 89 will also expire in June.
It was also gathered that Deep Offshore Integrated and Virgin Forest E&P’s licence to run the Bime field in OML 49 is set to expire at the same time. Platform Petroleum, Shepherdhill, and Nord Oil’s SHN Energy Ltd are currently the operators of the Kurl field in OML 49, but the licence expires soon.
Our correspondent reports that the licence issued to Northwest Petroleum, Genesis Technical, and Gab & Nutella to operate the Ede field of OML 67 under Ede E&P Ltd is also affected. Duport’s Ekpat field in OML 67 is also involved, as well as Oceangate Engineering Oil’s Udara field in OML 70.
Nkuku field of OML 70, being operated by NIPCO E&P, Aries Petroco Resources, Vhelberg E&P, Pathway Universal Investment, Grende Oil, and AMG, is also affected. Our correspondent gathered that some of the holders of these licences have left them idle since 2022.
According to the document sourced from the NUPRC website, it was stated in accordance with the PIA and other regulations that an application shall be made to the commission for renewal of an oil mining lease or conversion under certain regulations.
“In the case of a production sharing contract, the application shall be made by the concessionaire. In the case of indigenous Nigerian companies on a sole risk basis for which the government has not backed in, the application shall be made by the concessionaire(s), which include assignees.
“In the case of a joint venture, the application shall be made jointly by the concessionaire(s). In the case of marginal fields, the application shall be made jointly by the awardee(s). In the case of a renewal of an oil mining lease granted to Nigerian companies on a sole risk basis for which the government has successfully backed in, the application shall be made and signed jointly by the concessionaire(s).
“In the case of an oil mining lease, an application for renewal shall be made to the Commission by the lessee(s) pursuant to section 303(1) of the Act and the regulations,” it was stated.
According to the commission, in the case of renewal of an oil mining lease, pursuant to Sections 303 (1) and 93 of the Petroleum Industry Act, the application shall be made at least 12 months before the expiration of the oil mining lease. This means that any company that wants its licence renewed ought to have applied for that since June last year.
The NUPRC told our correspondent that the law provides for an optional extension of three or five years, depending on the terrain. However, the extension will depend on the company’s performance.
The commission’s Corporate Affairs Manager, Olaide Sonola, said in an exclusive interview that the renewal or otherwise depends on the result of an ongoing engagement with these companies. Sonola added that this will also have to do with the guidelines the commission is working on.
“The law provides for an optional extension of three or five years, depending on the terrain. The extension will depend on the company’s performance, the result of an ongoing engagement, and the guidelines we are working on,” she said.
Expert reacts
An energy expert, Professor Emeritus Wumi Iledare, said the renewal of the licences is only likely if meaningful exploration or development activities have been undertaken. According to Iledare, where such activities are absent, renewal becomes increasingly unlikely.
After careful scrutiny of the NUPRC data, Iledare said the licenses are primarily Petroleum Prospecting Licenses governed by the stipulations of the Petroleum Industry Act. He stated that each licence comes with a predetermined expiration or relinquishment date.
Renewal, he stressed, is contingent upon meeting the criteria set by the upstream regulatory commission. The don noted that the holders of the oil blocks ought to or might have contacted the commission since they knew their licences would expire soon.
“It is not unusual for licences to expire after the initial three-year term, and renewal is only likely if meaningful exploration or development activities have been undertaken. Where such activities are absent, renewal becomes increasingly unlikely,” Iledare stated.
He commended the commission for supporting leaseholders and enforcing the PIA. “The commission deserves commendation for its efforts in supporting leaseholders while firmly enforcing the PIA’s provisions, particularly regarding the timely relinquishment of hydrocarbon blocks at the end of their terms. I am proud of this new approach to regulatory enforcement under the PIA,” Iledare added.
Meanwhile, the Federal Government has made known its determination to revoke all dormant oil assets.
Apparently worried by the country’s dwindling oil revenue, the Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, said the ‘drill or drop’ policy will be implemented, saying the government will take over all idle oil wells from operators holding on to them.
The government also threatened to revoke all licences given to individuals and companies that have refused to start oil exploration.
“One of the things we want to do to ramp up production is to see that any well that is idle has to be allocated to people. The PIA gives the opportunity that any well that hasn’t been used in the past few years could be farmed out and given to people who have proven capacity to do exploration so that we can boost production.
“I am engaging stakeholders, the IOCs, the Nigerian National Petroleum Company Limited to say, ‘Look, if you have a multiplicity of oil wells and you are not using them, we will apply the law’.
“One of the reasons why our production is low is because we have too many shut wells, some of them contiguous to our marginal fields or oil wells. But by the time we take those wells in line with the law and give them to people, and we give a timeline upon which you must produce, we will be able to increase production,” Lokpobiri said at a function last year.
=== PUNCH ===
