Experts see discretionary power to award oil licences in PIB as unprogressive

Jonathan-360x225The inclusion of the right to discretionary power to award oil licences by the president, and on delegated basis, by the minister of petroleum resources, in the current Petroleum Industry Bill (PIB) has been described as a lethal blow and unprogressive by industry analysts. According to them, if the provision is allowed to scale through, it would defeat the purpose of the entire bill.

Obiageli Ezekwesili, former vice president of the World Bank, Africa region, while speaking at the second Sustainability in the Extractive Industries Series last week, organised by CSR-in-Action in partnership with BusinessDay, indicated the need to expunge the provision from the bill, adding that it is contrary to the principle of the Nigeria Extractive Industries Transparency Initiative (NEITI).

While commending the good provisions in the PIB such as the host communities’ fund, the duo of Ezekwesili said: “The discretionary power to award oil licences by the president and on delegated basis by the minister of petroleum is a lethal blow and just takes us to the past.”

The former federal minister of solid minerals stated that while she occupied that position, they removed the power of the minister to award exploration and mining licences, adding that they created a mining cadastre office, an autonomous body administering mining titles with integrity and in a transparent manner.

In a similar vein, Dayo Ayoade, senior lecturer, energy law, University of Lagos, said the provision would defeat the purpose of the bill, which seeks to overhaul the oil industry.

Commenting on the devastation of the Niger Delta, the seedbed of the nation’s oil and gas resources, Jemie Onwuchekwa, editor-in-chief, BusinessDay, at a panel session stress the need for the clean up of the environment. “It is not a burden for the private sector alone, government need to be involved in the clean up.”

Stakeholders and other participants at the event stated that companies in the sector need to have sustainability practices such that they earn the social licence to operate from their host communities, calling for the implementation of the Niger Delta Master plan and clear, coordinated action.

Section 191 of the 2012 PIB currently before the National Assembly confers on the president powers to grant licenses and leases in special circumstances for oil exploration and mining in the country.

The licences and leases include the Petroleum Exploration Licence (PEL), the Petroleum Prospecting Licence (PPL) and the Petroleum Mining Lease (PML).

PEL is awarded for the non-exclusive right to carry out petroleum exploration and is valid for three years; PPL, which is valid for five years for onshore and shallow water acreages and eight years for deepwater and frontier acreages, is awarded for the exclusive right to carry out petroleum exploration operations and to carry away and dispose of any crude, natural gas or bitumen discovered during prospecting operations.

PML gives a lessee the exclusive rights to carry out upstream petroleum operations, which include activities to; develop and produce petroleum deposits as well as restart or continue petroleum production and it is valid for at least 20 years.


[Business Day]



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