The production of 25,000 barrels per day is required as the minimum production level (commercial quantity) for conversion of a deep offshore OPL to an OML. Only the holder of an OPL is entitled to apply for conversion of Oil Prospecting License to an Oil Mining lease, through the Department of Petroleum Resources (DPR) for approval. (500 m2) and the specified duration is 20 years. The OML grants exclusive rights to explore, win, produce and carry away petroleum from the relevant area. An OML is granted upon confirmation of potential for commercial production of petroleum from the License. For the deep water blocks and frontier basins the exploration period is ten (10) years, broken into two 5-year periods which automatically roll over unless otherwise withdrawn due to non-performance.Ī Licensee who has fulfilled the work commitment according to Petroleum (Drilling and Production) Regulations of 1969 and the conditions otherwise applicable to the individual License may demand that the License be converted to an OML. The OPL is granted in inland basins for an initial period of 3 years with the option of renewal for a maximum period of 2 years. This confers exclusive rights of surface and subsurface exploration for the production of petroleum in an area not more than 2590 km2. The State reserves the right to participate in the operations of any block and to determine the type of contractual arrangements between the Allotee(s) and the Government. The allocations will be based on a set of criteria that would be made known to deserving companies at the time such blocks are open for bidding. The State allocates acreages (Licenses) to operators in any such areas deemed to have potential for petroleum accumulation at the discretion of the Minister of Petroleum Resources.
There are two types of Licenses issued to oil producers in Nigeria namely: the Oil Prospecting License (OPL) and the Oil Mining License (OML) with validity periods ranging from 5 to 20 years respectively.Īll the Petroleum (Crude Oil) in Nigeria is vested in the Federal Government, whose sole responsibility it is to control the resources and only permit their exploitation under license, in accordance with the Petroleum Act 1969.
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