TA

Tope Adebayo LP





Established in 2008, Tope Adebayo LP offers holistic solutions in energy, disputes, and corporate transactions. Our diverse team crafts bespoke strategies for clients, driving industry wins and growth. We are a one-stop shop, licensed for legal, finance, and corporate services, with a global network for seamless cross-border transactions.



Under the Petroleum Act (PA), there were 5 major grounds on which an Oil Prospecting Licence (OPL) could be revoked.


Nigeria
Energy and Natural Resources


To print this article, all you need is to be registered or login on Mondaq.com.

Under the Petroleum Act (PA), there were 5 major grounds on
which an Oil Prospecting Licence (OPL) could be revoked. Following
the enactment of the Petroleum Industry Act (PIA) 2021, the grounds
for revocation of a Petroleum Prospecting Licence (hereinafter
referred to as “PPL” or the “Licence”) have
been expanded to include circumstances not withtin the
contemplation of the PA. In the subsequent paragraphs, we shall
examine these modifications.

Innovations Introduced by the PIA

  1. The nationality of the management or place of incorporation of
    the controlling company of the Licensee is no longer a ground for
    revocation.

  2. Although the Minister retains the power to revoke a License for
    failure to furnish reports and data required by law, this can only
    be exercised after the Licensee has been issued a written notice of
    such default by the Nigerian Upstream Petroleum Regulatory
    Commission (the “Commission”).

  3. It is no longer sufficient for the Licensee to carry on
    operations continuously, in a business-like manner and according to
    good oilfield practice, the Minister now possesses power to revoke
    a Licence where petroleum operations within the Licence area do not
    meet international industry standard amongst others.

  4. The PIA makes express provision for the assignment, novation or
    transfer of any interest in a PPL in contravention of the PIA to be
    a ground for revocation. This was impliedly provided for in the
    Petroleum Act by the combined reading of Paragraph 14 and 25(1)(b)
    of the First Schedule to the PA.

Other grounds for revocation introduced by the PIA
include where the Licensee:

  1. interrupts production without justification for over a period
    of 180 days or for a period as specified in the licence or approved
    field development plan,

  2. obtained an interest in the licence through false
    representation or in contravention of corrupt practices and money
    laundering laws,

  3. is declared insolvent or bankrupt by a competent court or is
    liquidated, in each case except as part of a solvent plan or scheme
    of reorganisation, amalgamation or arrangement,

  4. has failed to comply with environmental obligations prescribed
    under the applicable law or the licence,

  5. is owned, wholly or in part, directly or indirectly or is
    controlled by a former or serving public official or member of the
    Government, who obtained interest in the licence other than as
    permitted by applicable law,

  6. fails to submit a field development plan and work commitment as
    prescribed by the PIA,

  7. fails to abide by any expert determination, arbitral award or
    judgement arising from the dispute resolution provisions contained
    in the licence or the PIA,

  8. fails to comply with domestic crude oil supply obligations or
    domestic gas delivery obligations imposed by the PIA or any
    subsidiary Regulation,

  9. fails to comply with host communities’ obligations imposed
    by the PIA.

To read the full article, kindly download the PDF

To view original Tope Adebayo article, please click here.

Originally published November 27, 2023

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.

Source link