…Seeks Cut In Duration, Split Of Oil Licenses

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The Nigerian National Petroleum Corporation, (NNPC) has called for a downward review of the duration of petroleum licences as stipulated in the draft Petroleum Industry Administrative legislation, (PIAB) currently before the National Assembly.
In a statement last Friday, Group Managing Director of NNPC, Mr. Maikanti Baru, also recommended the splitting of petroleum licences into two components for prospecting and production phases.
Baru advocated a re-think of the duration of licences as proposed in the PIAB which stipulates initial duration of 25 years for onshore and shallow water petroleum licenses and 30 years for deep water and frontier acreages.
He proposed five years prospecting licences for onshore and shallow fields and a duration of 10 years for deep offshore and frontier basins.
The NNPC boss also recommended 20 years production lease for onshore and shallow fields and deep offshore and frontier basins, noting that only the production lease period should be renewed for not more than 20 years.
The NNPC’s recommendation under the PIAB also seeks a break-up of Petroleum Licence into Petroleum Exploration Licence, PEL – 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, carry away and dispose of petroleum.