*The House of Representatives, in the National Assembly, Abuja, is considering 鈥榓 bill for an Act to amend the Petroleum Industry Act, 2021 to provide for licensing requirements for the operation of oil wells, petroleum prospecting licenses and, for revocation of licenses from non-performing oil fields and for related matters鈥�

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In line with the provisions contained in Nigeria鈥檚 Petroleum Industry Act 2021, the House of Representatives, in the National Assembly (NASS), Abuja, FCT, has commenced moves to amend the PIA to make provision for non-producing oil wells to lose their operational licences henceforth.

It was learnt the House, September 26, 2024, had passed for first reading via 鈥淎 bill for an Act to amend the Petroleum Industry Act, 2021 to provide for licensing requirements for the operation of oil wells, petroleum prospecting licenses and, for revocation of licenses from non-performing oil fields and for related matters.鈥�

A sighted copy of the bill indicated that the proposed law seeks amendment to Section 81 through the insertion of new sub-sections 2 and 3.

The bill, sponsored by Hon. Ikenga Ugochinyere, a member of the House of Representatives representing Ideato North/Ideato South Federal Constituency, in Imo State, is expected to return to the floor of the Lower Vhamber of NASS within weeks, according to report.

On licensing requirements for petroleum mining lease, sub-section 2 provides that 鈥淎 petroleum mining lease shall be granted under sub-section 1 of this section where the holder of a petroleum prospecting licence shows a minimum crude oil refining capacity of 50,000 barrels per day.鈥�

The amendment in sub-section 2(a) allows licensees with little refining capacity to come together to operate.

It also stated: 鈥淎ny petroleum prospecting licensee without the minimum crude oil refining capacity specified in this section may form a consortium consisting of not more than five licensees and such a consortium shall be granted a license for the field.鈥�

Sub-section 2 (b) of the bill powers the Nigerian Upstream Petroleum Regulatory Commission to provide the framework for the operations of such company consortiums.

On regulatory revocation of oil licences

The bill in sub-section 3 provides that 鈥淲here a licensee fails to produce the required capacity of crude oil for a continuous period of two years, the commission shall revoke the licence of that licensee.

鈥淭his provision shall also apply to the consortium under sub-section 2鈥�, just as the bill has further clarified what constitutes 鈥渁 non-producing oil field鈥�.

It noted: 鈥淚n this section (3a), an oil field shall be considered non-producing if there has been no crude oil production, reinjection for storage, or any other approved operational activity from that oil field over a continuous two-year period.

3(b) provides that 鈥淭he Commission shall prescribe regulations and guidelines for monitoring oil well performance, criteria for determining non-performance, notification procedures prior to revocation, and the revocation process under this section.鈥�

Since its enactment in 2021, there have been calls from industry stakeholders, including the Host Communities of Nigeria Producing Oil and Gas, Independent Petroleum Producers, and Oil Producers Trade Section, among others for the amendment of the PIA, report said.

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