New oil licences to await passage of PIB

Reports from Businessday indicate that the Federal Government intends to stall the award and renewal of Oil Licenses pending the passage of the Petroleum Industry Bill (PIB) submitted to the House of Assembly in July 2012.

The last licensing round was conducted in May 2007 by the administration of former President Olusegun Obasanjo. Plans were made to hold bid rounds in 2010 and 2011 but had to be shelved due to the non-passage of previous PIB drafts. The Minister of Petroleum Resources, Mrs Diezani Alison-Madueke, had fixed December 2012 and January 2013 as possible dates for the new bid rounds but the National Assembly’s inability to pass the current draft put a halt on the move.

Likewise, the government has since discontinued renewals of existing Oil Licenses. Shell, Chevron as well as other operators have since 2009 been unsuccessful at lobbying the government to renew their Licenses.

There are speculations that this delay is so as to have the new fiscal and regulatory terms apply to all licenses granted henceforth.

The fiscal provisions in PIB seek to increase governments take in oil revenue from 61 percent to 73 per cent, a scenario oil majors criticize and reckon will make investments unprofitable.

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