The Nigerian Upstream Petroleum and Regulatory Commission (NUPRC) says it is considering revoking licences of oil exploration leases that are yet to be used by oil companies.
In an interview with Reuters, CEO of NUPRC, Gbenga Komolafe, said the commission would soon initiate reviews of the abandoned leases, while awarding new leases based on “specific terms and conditions.”
This is just as latest data from the commission showed that over 60% of the prospecting licenses issued to local and foreign oil firms had expired.
“The Nigerian government issued 53 exploration leases, some dating back to 2003, to oil companies but 33 have since expired and not renewed, including four, which are bogged down by contract disputes. The leases have not been automatically revoked, but the regulator is no longer willing to let the companies hold on to leases indefinitely.”
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With Nigeria currently seeking for new investment to boost production, there has been a steep decline in oil production due to crude theft, pipeline vandalism and lack of new investment in the sector.
“Based on the PIA (Petroleum Industry Act), the commission is focused on delivering value for the nation so only firms that are technically and financially viable will keep their leases,” Komolafe said.
He said some of the expired leases belong to listed energy firms like Oando and the exploration unit of TotalEnergies.
The report noted that investments in oil exploration in Nigeria have reduced as oil companies exit onshore and shallow water assets due to rising insecurity and sabotage of oil infrastructure and legal disputes with communities in the Niger Delta.
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