11 oil blocks to expire this year as PIB delays licensing round – Guardian

Hopes that the Federal Government would hold any licensing round for oil blocks this year is dim due to the delay in the passage of the Petroleum Industry Bill (PIB).

This is coming even as about 11 Oil Processing Lease (OPL) and Oil Mining Licenses are due to expire this year.

Already, some of the OPLs and OMLs have expired since April and some in August, while others will be expiring by the end of this year.

 According to concession report by Department of Petroleum Resources (DPR) obtained by The Guardian, Oil OPL 452 onshore field belonging to Concession of Amalgamated is expiring this year.Also, Atlas Petroleum Nigeria Limited OML 109 is billed to expire this year; Cavendish Petroleum Nigeria Limited OML 110 is expiring this year.Others are Conoil Producing Limited OML 136; Crownwell Petroleum Limited OPL 305 and OPL 306; Knoc Nigeria OPL 321 and 323; New Nigeria OPL 733, 809, 810 and 722; Starcrest OPL 291; and Nigeria Petroleum Development Company OML 111.

A reliable source told The Guardian that Nigeria may not hold a major oil licensing round until the PIB is passed into law.

The Guardian gathered that the failure by the Federal Government to organise a bid round for marginal fields was as a result of the delay in the passage of the petroleum industry bill.

In 2013, the government flagged off the second oil marginal fields licensing round aimed at deepening the participation of indigenous oil companies in the upstream sector of the oil and gas industry.

The Department of Petroleum Resources (DPR) was to undertake a road show about the programme in two weeks, followed by a three and a half month of the competitive bidding process.

However, the competitive bidding round which was expected to be completed by March 2014, failed to meet the March deadline after many other cancellations and postponements of the exercise in the past.

Two years after the announcement, the bid round is yet to be held by the DPR and this has been linked to the delay in passing the PIB.

The OPL is granted in inland basins for an initial period of three years with the option of renewal for a maximum period of two years.

For the deep water blocks and frontier basins the exploration period is ten years, broken into two five year periods which automatically roll over unless otherwise withdrawn due to nonperformance.

An OML is granted upon confirmation of potential for economic production of petroleum from the license. The OML grants exclusive rights to explore, win, produce and carry away petroleum from the relevant area.

Speaking on acreage allocation in Nigeria, Chairman, Energy Institute, and former Director, Department of Petroleum Resources, DPR, Mr. Osten Olorunsola stated that the Minister of Petroleum Resources is vested with the power to allocate open blocks or acreages.