After petroleum resources have been discovered in commercial quantities, upon the expiration of the OPL, it is either relinquished back to the government or converted into an Oil Mining Lease. The OPL holder would need to apply for an Oil Mining Lease to allow full-scale commercial production in the leased area. OML is only granted to OPL holders, where the Minister is satisfied upon evidence adduced by the licensee, that the licensee is capable of producing at least 10, barrels of crude oil per day from the licensed area.
This license grants the leaseholder the exclusive right to prospect, explore, produce and undertake market activities in a specified acreage for a period of 20 years. It states that within 6 months of the date of grant of the license, seismic data acquisition shall commence and continue until the area is fully investigated; not later than 18 months of the grant, drilling operations shall also commence with a modern oil well drilling outfit all through the prospective zones in the relevant area to satisfy the minimum obligation for the application for conversion of an OPL to OML.
The laws that guide the oil prospecting activities in Nigeria are many. We have highlighted a few of them below:. To acquire an interest in an oil field, a company must first acquire licenses which are granted subject to the approval of the Minister for Petroleum Resources. The Oil Prospecting Licence is granted for the purpose of exploiting petroleum found in commercial quantity.
Before it can be granted, the applicant must satisfy and fulfil some conditions stipulated by the Minister. Upon the fulfilment of the conditions set out by the Minister, the holder of the OPL License after discovering oil in commercial quantity and satisfies the Minister that it can produce a minimum of 10, barrels of oil per day, can apply for the license to be converted to an Oil Mining Lease, which will enable the company to produce and dispose of petroleum discovered for a long period of 20 years subject to renewal.
An OPL holder cannot extend its scope of operations beyond the area covered by its license. This means that the holder cannot produce and dispose of petroleum until it converts its current license to an OML.
It has a total of proven and probable reserves 2P reserves of 1. Furthermore, Heirs Holding has stated that infrastructure in the area could allow for the production of , barrels per day bpd of oil and million cubic feet per day mcfd of gas.
While describing the nature of the work expected at the new oilfield, the company indicated that the contractor will carry out the work under an Engineering, Procurement, Installation and Commissioning EPIC contract.
It was also stated that the scope of work includes the installation of a pump gathering station to collect well fluids from the Elelenwa West manifold and transport them to the Agbada-1 flow station for processing. Facebook Twitter WhatsApp Telegram.
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Cameroon were the only team out of 24 at the…. APO Press Releases. Reps committed to legislative agenda that will promote manufacturing — Gbajabiamila. The Nigerian government through the office of the Honourable Minister for Petroleum Resources grants all these licenses, upon the application to the Department of Petroleum Resources in accordance with the Petroleum Drilling and production Regulations The relevant licenses required to participate in the Nigerian petroleum sector include Oil Exploration License, Oil Prospecting License and Oil Mining Lease.
Grant of Oil Mining Lease The oil mining lease is one of the most important and common licenses required to participate in the petroleum upstream sector. Functions or Usage of Oil Mining Lease Oil mining lease enables the lessee, to exclusion of any other one. Conditions and Required Documents to Process Oil Mining Lease The first and foremost thing to do before applying for an oil mining lease in Nigeria is to incorporate a company or have an existing company to use.
List of Equipment facility of the company. Evidence of safety, health environment and security arrangement. Evidence of Medical and Retainership agreement with a hospital Evidence of financial capability Any other the petroleum minister may require It is worthy of note that any companies who wish to mine oil in Nigeria are eligible to apply for the oil mining lease, provided they can satisfy the requirements stipulated for the obtainment of the mining lease.
Conclusion Finally, oil mining lease usually valid up to 20 years when issued. Related Posts.
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