The Nigerian National Petroleum Corporation on Wednesday called for the splitting of petroleum licences into prospecting and production phases under the draft Petroleum Industry Administrative legislation currently before the National Assembly.
According to the corporation’s Group Managing Director, Maikanti Baru, the proposed split will prevent a situation where operators will sit perpetually on oil acreages.
Baru stated this in a presentation at the public hearing organised by the House of Representatives Committee on the Petroleum Industry Administrative Bill, Petroleum Industry Fiscal Bill and the Petroleum Industry Host Community Bill in Abuja.
The NNPC’s recommendation seeks a break-up of the petroleum licence into petroleum exploration licence, which has to do with petroleum prospecting, and petroleum lease, which will cover the production phase to search for, win, work, carry way and dispose of petroleum.
The corporation is also pushing for a re-think of the duration of licences as proposed in the PIAB, which stipulates an initial duration of 25 years for onshore and shallow water petroleum licences, and 30 years for deep water and frontier acreages.
The NNPC, however, proposed five years prospecting licences for onshore and shallow fields and 10 years for deep offshore and frontier basins.
It recommended 20 years’ production lease for onshore and shallow fields as well as deep offshore and frontier basins. The corporation noted that only the production lease period should be renewed for a period not exceeding 20 years.
