The Nigerian National Petroleum Corporation NNPC has recommended the splitting of petroleum licenses into two components for prospecting and production phases under the draft Petroleum Industry Administrative legislation currently before the National Assembly.
In a presentation at the Public Hearing organized by the House of Representatives Committee on the Petroleum Industry Administrative Bill, Petroleum Industry Fiscal Bill and the Petroleum Industry Host Community Bill, the Group Managing Director of the Corporation, Dr. Maikanti Baru, said the proposed split would prevent a situation where operators would sit perpetually on oil acreages.
The NNPC’s recommendation under the Petroleum Industry Administrative Bill seeks a break up of Petroleum Licenses into Petroleum Exploration License, to prospect for petroleum, while the second component to be known as Petroleum Lease, should be created to cover the production phase to search for, win, work and dispose of petroleum products.
The Corporation also pushed for a re-think of the duration of licenses as proposed in the Petroleum Industry Administrative Bill, which stipulates initial duration of twenty-five years for onshore and shallow water petroleum license and thirty years for deep water and frontier acreages.
NNPC, however, proposed five years prospecting license for onshore and shallow fields and a duration of ten years for deep offshore and frontier basins.
It recommended twenty years production lease for onshore and shallow fields as well as deep offshore and frontier basins.
The corporation noted that only the production lease should be renewed for a period not exceeding twenty years.
The Chairman of the House Committee, Mr Alhassan Ado Doguwas, thanked the NNPC for its contribution, noting that the committee would sift through all the submissions by stakeholders before taken informed decisions on the issues.
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