Earlier this week, Nigeria held a grand ceremony in Abuja to unveil its Host Communities Development Regulations and Petroleum Prospecting Licences (PPLs) under its newly-adopted Petroleum Industry Act (PIA).
The regulations are expected to provide a more durable and sustainable framework to engage local communities in the development of the country’s oil and gas sector. The PPLs regulations, on the other side, are a departure from the former regime as they mark the end of Farm-out Agreements for marginal fields.
Moving forward, marginal fields will be awarded following open, competitive tenders resulting in the award of a PPL. The PPLs currently have a term of three years which can be extended by an additional three years, making the licenses valid for six years in total.
The ceremony held this week is the result of the 2020 Marginal Fields Bidding Round, where 540 applicants pre-qualified, out of which 161 were declared preferred bidders. According to Minister of Petroleum Resources Chief Timipre Sylva, the round was able to generate NGN 200bn in revenues to the Nigerian government.
Successful awardees who were able to pay for their signature bonuses were given their PPLs this week. They now have to form special purpose vehicles (SPVs) with their partners to develop their fields, in what was called an “arranged marriage” by many new licence owners.
“Nigeria is committed to implementing full beneficial ownership disclosure of the awardees through the development of a web-portal,” said Engr. Gbenga Komolafe, Chief Executive of the new Nigerian Upstream Petroleum Regulatory Commission (NUPRC).
The list of awardees announced this week, including individual entities, their respective fields and PPL numbers, is available within your Hawilti+ research terminal at plus.hawilti.com.