Ask Nigeria Header Logo

Nig. Gov’t to revoke oil exploration leases

Photo of author

By Mercy Kelani

NUPRC has a related main objective, as outlined in the Petroleum Industry Act.

The Nigerian Upstream Petroleum and Regulatory Commission (NUPRC) has been under scrutiny by the Federal Government to potentially revoke oil exploration leases that have been granted to companies but have not yet been utilized for any exploration endeavours. According to Gbenga Komolafe, the CEO of the Nigerian Upstream Petroleum Regulatory Commission, he highlighted the imperative for companies to demonstrate significant technical expertise and financial stability in order to maintain their possession of leases.

In Nigeria, the most recent statistics provided by the NUPRC reveal that more than 60% of the exploration licenses awarded to both domestic and international petroleum companies have now expired. These expirations come at a time when the nation is striving to entice fresh investments that will enhance its oil production capacity. Komolafe emphasized that the Commission has a main objective, as outlined in the Petroleum Industry Act (PIA).

Maximizing the benefits of the nation by making value delivery priority.

This major objective of the body is to ensure that only companies that are both technically and financially capable will retain their leases. The Petroleum and Regulatory Commission is dedicated to ensuring the maximization of the benefits of the nation by making value delivery priority. Oando (OANDO.LG), an energy company listed on the stock exchange, and TotalEnergies’ exploration division in the Niger Delta both possess a few leases that have already reached their expiration dates.

Also, Nigeria, with its status as the Giant of Africa and the continent’s primary oil exporter, has faced a decline in oil production due to the detrimental activities of crude theft and pipeline vandalism, along with an insufficiency of fresh investments dedicated to revitalizing the sector. Nigeria, in the year 2021, introduced a significant transformation to its oil sector by empowering the regulator to evaluate the technical and financial capabilities of enterprises possessing oil exploration licenses.

Major oil companies withdraw from onshore and shallow water assets.

Oil companies were granted a total of 53 exploration leases by the federal government of Nigeria. These leases varied in age, with some dating as far back as 2003, one decade ago. However, a significant number of these leases, namely 33, have expired and were not renewed. Among these expired leases, four are currently entangled in contractual conflicts. The regulator’s stance has changed, as they are no longer willing to allow companies to cling onto leases indefinitely.

However, this act by the federal government does not mean that the leases have been automatically revoked. Additionally, there has been a scarcity of oil exploration investments in the country as major oil companies withdraw from onshore and shallow water assets. This withdrawal by major oil companies across the nation is primarily due to the increasing insecurity and sabotage of oil infrastructure, as well as legal conflicts with the communities residing in the Niger Delta region.

Increase in the demand for Nigerian crude in Europe.

Furthermore, the industry has faced prolonged stagnation due to insufficient investments in exploratory endeavours, as well as a decrease in oil extraction caused by the rampant theft resulting from dismantling of pipelines. There has also been an Increase in the demand for Nigerian crude in Europe, which resulted from the European Union’s imposition of an oil embargo on Russia in response to the invasion of Ukraine. Many European refiners have increasingly favoured Nigerian crude oil grades, stated Maryamu Idris, the executive director of crude and condensate at NNPC Trading Limited, during November.


Related Link

UNEP: Website


The content on AskNigeria.com is given for general information only and does not constitute a professional opinion, and users should seek their own legal/professional advice. There is data available online that lists details, facts and further information not listed in this post, please complete your own investigation into these matters and reach your own conclusion. AskNigeria.com accepts no responsibility for losses from any person acting or refraining from acting as a result of content contained in this website and/or other websites which may be linked to this website.

Fact Checking Tool - Snopes.com

5 1 vote
Rate This Article
4 Comments
Oldest
Newest Most Voted
Inline Feedbacks
View all comments
AN-Toni
Editor
2 months ago

Nig. Gov’t to revoke oil exploration leases. – NUPRC has a related main objective, as outlined in the Petroleum Industry Act. – Express your point of view.

Kazeem1
Member
2 months ago

The oil industry act’s primary goal is in keeping with the government’s determination to revoke leases related to oil exploration. The government can guarantee responsible exploration activities that comply with ethical and social issues by canceling these leases.

Taiwo
Member
2 months ago

Renewal of oil exploration leases by the Nigerian government. As mentioned in the Petroleum Industry Act, NUPRC has a linked primary goal.Oil exploration leases should be terminated by the government or otherwise handled in a manner governed by laws. It is also important to provide fair compensation to the people where oil is investigated.

Adeoye Adegoke
Member
2 months ago

That’s interesting news! The Nigerian government’s decision to revoke oil exploration leases seems to align with the objectives outlined in the Petroleum Industry Act. This could be a significant step towards better regulation and management of the country’s oil resources. By revoking these leases, the government may have the opportunity to reevaluate and ensure that oil exploration activities are conducted in a sustainable and responsible manner. It’s important to strike a balance between economic development and environmental preservation. I hope this decision leads to positive outcomes and contributes to the long-term well-being of Nigeria and its people.