The newly enacted Petroleum Industry Act, 2021 (PIA) introduces key changes to the licensing and fiscal regime for upstream operations. However, licences and concessions granted under the old law (the Petroleum Act) do not automatically transition into this new regime. The PIA allows such holders to opt in to the new regime through a voluntary conversion process. This publication highlights for the benefit of upstream players currently holding interests in Oil Prospecting Licences, Oil Mining Leases, Production Sharing Contracts and Marginal Field assets, the fiscal regime ushered in by the PIA and the streamlined asset retention framework, to aid their election on whether to opt in to the PIA regime.

Managing Partner, Gbite Adeniji shares some insights on pertinent issues arising from the Petroleum Industry Act, 2021 and its implementation.

The Corporate Affairs Commission (CAC) has set June 30, 2021 as the deadline for all Nigerian companies to allot all shares in a company that are yet to be allotted to shareholders of such company (“Unissued Shares”) or face a default penalty. This alert may be relevant to you, if your company has unissued shares, or if your company, in the course of its business activities, has previously established special purpose vehicles (SPVs) as part of implementing corporate structures to develop projects, run service operations, participate in bids, etc.

Further to the issue of the Flare Gas (Prevention of Waste and Pollution) Regulations, 2018, which establishes a framework for the Nigerian Flare Gas Commercialisation Programme (NGFCP), the Department of Petroleum Resources issued an invitation for Expressions of Interest to participate in the competitive bid process for the award of ‘Permits to Access Flare Gas.’ It envisages the issuance of permits by the Minister of Petroleum Resources to third parties, via a competitive bid process, to capture and utilise such flare gas. If properly implemented, the NGFCP has the potential to achieve the Federal Government’s goal of eliminating gas flaring by 2020