Overview

The document is a Nigerian regulation titled 'Oil Prospecting Licences (Conversion to Oil Mining Leases, Etc.) Regulations 2004,' enacted under the Petroleum Act (CAP 350 LFN). Issued by President Olusegun Obasanjo as Minister of Petroleum Resources, it commenced on December 2, 2003. The regulations modify the conversion process of oil prospecting licences (OPLs) to oil mining leases (OMLs). Key provisions: (1) Despite earlier regulations, an OPL holder is eligible for no more than one OML upon conversion, per Schedule 1 paragraph 8 of the Petroleum Act. (2) However, the holder may apply for an additional OML from the same contract area if the Minister is satisfied with: (a) sufficient prospectivity and operational activity; (b) financial and technical capability of the licensee and contractor; (c) acceptance of specific terms depending on the existing operating arrangement—for production sharing contracts (PSC), a new PSC with terms no less favorable to the Federal Government than the NNPC model form; for sole risk arrangements, a joint venture (JV) with NNPC participation under the Deep Water Block Allocations to Companies (Back-in-Rights) Regulations 2003; for existing JVs, a JV with NNPC participation on terms determined by the Minister. In all cases, the fiscal regime shall be that prevailing at conversion unless the Minister decides otherwise. (3) Signature bonus payments for conversion are prescribed by the Minister, with quantum for additional OML at the Minister's discretion, considering current market value of the area.

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