Business News
New guidelines on oil prospecting
Sep 1, 2003, 18:13
| | President Olusegun Obasanjo has issued new regulations that will affect oil prospecting licenses and oil mining leases.
The new guidelines, which were signed into law on 5 July, are in accordance with Section 9(1) a and h of the Petroleum Act (Cap.350 LFN) and give Government the right to participate in any oil mining lease by acquiring five-sixth of the allottee’s interest.
Shedding more light on this Section, the Act reads: “the provisions of sub-paragraph (1) of this paragraph shall not be applicable to oil prospecting licenses or oil mining leases for deep water blocks in which the Federal Government already has 100 per cent interest through the NNPC”.
The Act also stipulates that such terms and conditions have to be determined from time to time by the Federal Government, adding that the terms and conditions of the agreement that govern “the acquired Federal Government participating interest in the oil prospecting licence and oil mining lease shall not be less favourable to the Federal Government than those in effect at the commencement of these regulations”.
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