Oando, TotalEnergies threatened as Nigerian govt moves to revoke unused oil exploration licenses

The Federal Government of Nigeria has unveiled plans to revoke all unused oil exploration licenses that have been granted to oil companies in the country but haven’t been able to carry out any exploration activities on them.

Latest data from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) showed that over 60% of the prospecting licenses issued to local and foreign oil firms had expired, at a time when the country is seeking new investment to boost production.

Some of the expired leases belong to listed energy firm Oando (OANDO.LG) and the exploration unit of TotalEnergies, all in the Niger Delta.

The Nigerian government issued 53 exploration leases, some dating back to 2003, to oil companies but 33 have since expired and not renewed, including four which are bogged down by contract disputes. The leases have not been automatically revoked, but the regulator is no longer willing to let the companies hold on to leases indefinitely.

READ ALSO:Oando, Afreximbank sign $800m deal

The Chief Executive, NUPRC, the commission supervising the upstream sector of the oil and gas industry, Engr Gbenga Komolafe told Reuters on Monday that only companies with viable technical and financial backup would be allowed to keep their leases

“Based on PIA (Petroleum Industry Act), the commission is focused on delivering value for the nation so only firms that are technically and financially viable will keep their leases,” he said.

Komolafe said the commission will initiate reviews of these leases and awards of new leases would be “subject to specific terms and conditions.”

Investments in oil exploration in Nigeria have been few and far between as oil majors exit onshore and shallow water assets due to rising insecurity and sabotage of oil infrastructure and legal disputes with communities in the Niger Delta.

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