Insights, Oil and Gas

Oil Licensing Regime Under the Petroleum Industry Act 2021: Petroleum Exploration Licence (Part 1)

Prior to the Effective Date of the Petroleum Industry Act, 2021 (“PIA”), oil exploration and exploitation activities in Nigeria was governed mainly by the Petroleum Act, 1969 (“PA”) which was the principal legislation governing the oil and gas sector. Exploration and production companies had to obtain the requisite licence from the Minister of Petroleum Resources (Minister) before embarking on petroleum operations. The licences the Minister could grant under the PA were the Oil Exploration License, Oil Prospecting License and Oil Mining Lease. This article seeks to examine the current licensing regime for exploration and production activities under the PIA vis-a-vis the PA.

THE NEW LICENSING REGIME
Following the enactment of the PIA, a plethora of changes were introduced to various aspects of the oil and gas industry including the licensing regime operative in Nigeria. The first noticeable change in the PIA in this regard is a change in nomenclature. The licence to carry out exploration activities, formerly known as the Oil Exploration License (OEL), is now referred to as Petroleum Exploration License (PEL).

Like the OEL, the PEL entitles the holder to carry out exploration activities within the area covered by the licence on a non-exclusive basis. Under the PA, the scope of area covered by an OEL did not include areas where an Oil Prospecting License (OPL) or an Oil Mining Lease (OML) was subsisting or approved for grant by the Minister. However, under the new regime, the area covered by a PEL may include an area under a subsisting Petroleum Prospecting License (PPL) or Petroleum Mining Lease (PML)…

 

 

 

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