The Upstream Oil and Gas sector in Nigeria is one of the most thriving industries in Nigeria. There have been progressive developments in the Energy space in Nigeria, the latest being the emergence of the Petroleum Industry Act.
In this article, we cover the basics of the oil and gas sector and the licenses required by law to operate in the upstream oil and gas sector in this industry in Nigeria.
The Oil and Gas Sector In Nigeria
To venture into the Oil and Gas Sector in Nigeria, it is important to determine the applicable license type relevant to your choice operations.
In Nigeria, there are two key sectors in the Oil and Gas industry. The upstream sector, midstream, and downstream sectors. To operate in these sectors, there are prescribed licenses for the varying industry sectors.
The core of this article is on the upstream sector in Nigeria.
Starting Out In The Upstream Oil and Gas Sector In Nigeria
The upstream sector in Nigeria focuses on exploration and production activities ranging from onshore and offshore drilling activities, geological surveys, etc.
To operate in this sector, you need to obtain the appropriate license. The PIA has provided three kinds of licenses that upstream explorers must obtain.
1. The Petroleum Mining Lease
This license is exclusively granted in respect of activities related to the disposal and working of crude oil, natural gas, and condensate. The license period is for twenty years.
Importantly, this lease may also be granted on a non-exclusive basis for petroleum exploration activities.
2. Petroleum Prospecting License
Equally exclusive, this license is granted for the drilling and exploration of appraisal wells as well as the conduct of test production. It is important to take note of the applicable license period for different operations under this category as well as the limitation of land expanse for respective operations.
3. Petroleum Exploration License
This is a non-exclusive license given to the licensee to carry out petroleum activities. It’s important to note that this license is valid for three years subject to a three-year renewal period.
In conclusion, prospective players in the upstream petroleum industry need to stay updated with the developments introduced by the PIA. Get information on the types of licenses applicable to this category and the ambit and the limitation of such respective licenses.
References
1 https://guides.loc.gov/oil-and-gas-industry/upstream accessed on March 22 2023
2 https://www.google.com/url?sa=t&source=web&rct=j&url=https://www.tekedia.com/available-upstream-downstream-oil-gas-sector-licenses-in-nigeria-all-you-need-to-know/&ved=2ahUKEwjFgNiThvL9AhXn97sIHcnsAnUQFnoECAoQAQ&usg=AOvVaw30nyD8Pw7MR5W4cxV3V4oC accessed on March 22 2023
Do you seek redress or consultation on legal matters?
Our Law Firm – Scotts Legal – offers legal services in areas including but not limited to the following:
- Real Estate Services (Property Acquisition, Investigation, Registration, Property Management)
- Company Registration and Post-Incorporation Services
- Corporate and Commercial Law solutions
- Domestic Violence and Child Custody
- Cross Border Transactions
- Debt Recovery Services
- Commercial Litigation
- Intellectual Property
- International Trade
- Criminal Litigation
- Employment Law
- Client Advisory
- Civil Litigation
- Mining Law
- Tax Law
Follow us on our social media handles:
Constantly get our news updates and informative articles.