Lease acquisition and renewal: Indigenous operators identify policy inconsistency as a challenge

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By Ikenna Omeje

Some indigenous operators in the Nigeria’s oil and gas industry have identified policy inconsistency in lease acquisition and renewal as one of the major challenges facing the industry.

They stated this during a panel discussion at the ongoing Nigeria Annual International Conference and Exhibition (NAICE) 2019 holding in Lagos, with the theme: “Artificial Intelligence, Big Data and Mobile Technology: Changing the Future of the Energy Industry.”

Speaking on, “Lease Acquisition and Renewal: The Nigerian Case Study” which was moderated by the Chairman, Energy Institute, Osten Olorunsola, the operators, which were the Managing Director, Geo-Concept Technical Limited, George Osahon; Chairman/CEO, Brittania-U Nigeria Limited, Catherine Ifejika; the Managing Director, Platform Petroleum Limited, Osa Owieadolor and the Commercial Integration and Business Value Manager, Shell Petroleum, Taaj Shobayo criticized the review of lease acquisition from for life to 20 years and then again, to 10 years. They said that according to the Petroleum Act, once one has fulfilled all the necessary requirements, the person’s lease will be renewed. But alleged that sometimes it may not be renewed, even after meeting the requirements.

They called on the Federal Government and its agencies to support indigenous operators by making it easy for them to access loan, reduce taxes and create a warning signal before revoking or denying them lease renewal.

On bid for Marginal Fields, they said that it’s long overdue and admonished the government to do a round bid for the first time in 16 years.

In his response, the Deputy Director, Department of Petroleum Resources (DPR), Sani Hassan, said that the Federal Government, DPR and other relevant agencies have been doing their best in the area of assisting indigenous operators in the oil and gas industry.

He said that lease acquisition can happen in two ways. First, when the government decides to do a bid. Secondly, when a company decides to sell its equity.

Hassan said that some of the indigenous operators hold on to leases without doing anything with them. He, however, noted that there are some of them who are  doing very well.

He stressed that once one meets the requirements for lease renewal which includes: Copy of Incorporation Certificate and certified true copy of other incorporation documents; Duly completed application form;Payment of prescribed fee; Copy of Tax Clearance Certificate and VAT Certificate; Succinct Profile of the company; Staff List and Resume of the key Staff; Training Program scheduled for Nigerian Staff; Copy of MOU with Nigerian company or DPR Accredited laboratory; List of Equipment facility of the company; Evidence of safety, health environment and security arrangement; Evidence of medical and Retainership agreement with a hospital; Evidence of financial capability; and  any other the petroleum minister may require, the person’s lease will be renewed.

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