Abstract
In response to contemporary challenges in Nigeria’s oil and gas industry, such as
overconcentration of powers in the hands of the Minister of Petroleum Resources, the
overburdening of the Nigerian National Petroleum Corporation with the dual responsibility of regulator and operator in the petroleum industry, it became imperative to implement reforms ensuring maximum and sustainable value from its resources. Although the reform process began in 2001, it culminated in the Petroleum Industry Act (PIA) of 2021, which introduced key provisions for upstream petroleum governance. Using the doctrinal methodology, reliance was placed on primary sources of law such as the Petroleum Act 1969, Petroleum Profits Tax Act 2004, Petroleum Industry Act, 2021, and other legislations and regulations. The objective of this paper was to appraise the administration, regulation, and structure of the PIA’s upstream
exploration governance. Key areas covered include Acreage Administration, the National Grid System, and licensing structures such as the Petroleum Exploration licence, Petroleum Prospecting Licence, and Petroleum Mining Lease. It also explored model contracts, including production sharing, profit sharing, and risk service contracts, as well as concession agreements. Additionally, it reviewed conditions for relinquishment, surrender, and conversion of licenses and leases, along with procedures for assignments, mergers, transfers, acquisitions, and revocations. Other governance issues addressed include provisions on marginal fields, environmental management, and compensation for damages to protected objects. Domestic Crude Oil Supply and Domestic Gas Delivery Obligations are also considered. This paper found that Section 94(9) removes any provision for the declaration of new marginal fields. Flowing from the finding of the paper, it was recommended that Section 94(9) which removes provision provides for the declaration of new marginals should be deleted since the provisions of marginal fields is primarily aimed at encouraging indigenous participation, and scrapping it will defeat this purpose.
overconcentration of powers in the hands of the Minister of Petroleum Resources, the
overburdening of the Nigerian National Petroleum Corporation with the dual responsibility of regulator and operator in the petroleum industry, it became imperative to implement reforms ensuring maximum and sustainable value from its resources. Although the reform process began in 2001, it culminated in the Petroleum Industry Act (PIA) of 2021, which introduced key provisions for upstream petroleum governance. Using the doctrinal methodology, reliance was placed on primary sources of law such as the Petroleum Act 1969, Petroleum Profits Tax Act 2004, Petroleum Industry Act, 2021, and other legislations and regulations. The objective of this paper was to appraise the administration, regulation, and structure of the PIA’s upstream
exploration governance. Key areas covered include Acreage Administration, the National Grid System, and licensing structures such as the Petroleum Exploration licence, Petroleum Prospecting Licence, and Petroleum Mining Lease. It also explored model contracts, including production sharing, profit sharing, and risk service contracts, as well as concession agreements. Additionally, it reviewed conditions for relinquishment, surrender, and conversion of licenses and leases, along with procedures for assignments, mergers, transfers, acquisitions, and revocations. Other governance issues addressed include provisions on marginal fields, environmental management, and compensation for damages to protected objects. Domestic Crude Oil Supply and Domestic Gas Delivery Obligations are also considered. This paper found that Section 94(9) removes any provision for the declaration of new marginal fields. Flowing from the finding of the paper, it was recommended that Section 94(9) which removes provision provides for the declaration of new marginals should be deleted since the provisions of marginal fields is primarily aimed at encouraging indigenous participation, and scrapping it will defeat this purpose.
Keywords:
Petroleum Industry Act
Upstream Regulatory Governance
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