International Oil Companies (IOCs) seeking to renew their expired licences in various locations in Nigeria may be disappointed with the latest development, as the Group Managing Director (GMD) of the Nigerian National Petroleum Corporation (NNPC), Mele Kyari disclosed that the Corporation would not grant their requests.
The reasons explained: Kyari made known that the Corporation had no plan to renew the IOCs’ oil block licences, saying that the Federal Government was keen on utilising the functionalities of the NNPC.
“The GMD explained that there was no immediate plan to renew the licences as the Federal Government was interested in having the exploration and production arm of the NNPC,” the Corporation quoted Kyari.
What this means: In view of the latest development, IOCs that operate within the shores of the country with expired licences may be severely penalised because their activities will now be termed illegal.
Prior to this development, The former Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, had disclosed that the Federal Government was targeting about $2 billion from the renewal of oil and gas leases.
“We projected for the licence renewal probably around $2bn; right now, we are at about $1.2bn, $1.3bn. I don’t have the total number of the people renewing but I’m aware it should be around 20 to 30 renewal.”
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According to Kachikwu, most of the licences are due for renewal between 2019 and 2020, but the ministry had decided to start generating funds early.
According to the Minister, the law allows the renewal of a licence six months before expiration.