Overview The vests all rights to the nation’s petroleum resources in the Crown, but the government can grant licences that confer exclusive rights to ‘search and bore for and get’ petroleum. Each of these confers such rights over a limited area and for a limited period. Most licences follow a standard format but the OGA is flexible with this and will consider adapting new licences to suit special scenarios. The Secretary of State has discretion in the granting of licences, which is exercised to ensure maximum exploitation of national resource. You can go to the UK Oil Portal to (login required).

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The OGA’s expectations Licences can be held by a single company or by several working together, but in legal terms there is only ever a single licensee despite the number of companies it may represent. All companies on a licence share joint and several liability for operations conducted under it. Each licence takes the form of a deed, which binds the licensee to obey the licence conditions regardless of whether or not they are using the licence at any given moment. The OGA expects companies to work their licences. In recent years, the amount of acreage left untouched, and those exclusive rights unexploited, has become a matter of concern. This led (formerly the Oil & Gas Industry Task Force) to instigate the Fallow Initiative, which incorporated a process to ensure UK Continental Shelf ( UKCS) licences are optimally worked to maximise economic recovery of oil and gas. Geography The OGA’s licensing system covers oil and gas within Great Britain, its territorial sea and on the UKCS.

Nigeria Egypt Iran Iraq Compilations can be requested through contact@sptec-advisory.com. Figure 1: West Africa oil and gas concessions map. Angolan crudes lower then from Nigeria As Libyan crude. Oil and gas fields Map: West African oil exploration hotspots Map: East Africa oil and gas. Nigeria Oil and Gas Map. Edit this map Nigeria Oil and Gas Map near Nigeria. View Location View Map. Petroleum, concessions, blocks, licences, oil, blocks.

The designated area of the UKCS has been refined over the years by a series of designations under the Continental Shelf Act 1964 following the conclusion of boundary agreements with neighbouring states. This includes the, which implements an agreement reached with the Faeroe Islands. Northern Ireland Northern Ireland’s offshore waters are subject to the same licensing system as the rest of the UKCS. It receives a biennial payment from overall royalty and rental payments calculated in proportion to its population. Northern Ireland issues its own licences to cover its onshore area independently of the OGA. Isle of Man.

The issues licences for its own onshore area and territorial waters. Rentals Each licence carries an annual charge, called a rental. Rentals are due each year on the licence anniversary (except pre-20th Round Seaward Production Licences, which were only due in their initial year). Rentals are charged at an escalating rate on each square kilometre the licence covers at that date.

Rentals have 2 purposes:. to encourage licensees to surrender acreage they don’t want to exploit. to focus licensees on acreage they decide to retail Usually the companies on a licence agree among themselves (eg joint operating agreements) how to apportion costs, including rentals. However, the licence simply provides that each company is jointly and severally liable to the Secretary of State for all liabilities and obligations arising thereunder, and that it is not for the OGA to determine how the rentals should be apportioned. The OGA will therefore invoice a single company (known as the licence administrator and nominated by the licence group) for a single rental payment for each licence each year.

It will not collect separate rental payments within a single licence. Terms Seaward Production Licences, and Petroleum Exploration and Development Licences, are valid for a sequence of periods, called terms. These are designed to comprise the typical life cycle of a field: exploration, appraisal, production. Each licence will expire automatically at the end of each term, unless the licensee has sufficiently progressed to warrant a chance to move into the next term. The initial term is usually an exploration period. For Seaward Production Licences this is usually set at 4 years, although it can be longer for ‘frontier’ licences. For Petroleum Exploration and Development Licences, the intial term is set at 6 years and carries a work programme of exploration activity that the OGA and the licensee will have agreed as part of the application process.

This licence will expire at the end of the initial term unless the licensee has completed the work programme. At this time the licensee must also relinquish a fixed amount of acreage (usually 50%). The second term is intended for appraisal and development. It is 4 years for Seaward Production Licences and five for Petroleum Exploration and Development Licences. Both licences will expire at the end of the second term unless the Secretary of State has approved a development plan.

The third term is intended for production. It is 18 years for Seaward Production Licences and 20 for Petroleum Exploration and Development Licences.

The Secretary of State has the discretion to extend the term if production is continuing, but the OGA reserves the right to reconsider the provisions of the licence before doing so – especially the acreage and rentals. All the qualifying criteria for continuation into a following term of the licensee define the minimum amount of progress that the licensee must make. There is no suggestion that they set maximum amounts of progress that the licensee is allowed to make, or that they limit the exercise of the licensee’s rights. Relinquishments/surrenders Licensees are entitled to ‘determine’ (i.e.

Surrender) a licence, or part of the acreage covered by it, at any time (unless the licence is still in its initial term and the work programme is incomplete). The OGA positively encourages the surrender of acreage if the licensee does not intend to work it, and a minimum relinquishment of acreage at the end of the initial term is a condition of most licences. Partial surrenders are subject to restrictions, depending on the complexity of the area relinquished. The OGA does not wish to create unlicensed areas so irregular in shape to be unattractive to other companies.

Multiblock Licences Many licences cover more than one block. ‘Multiblock licences’ are offshore licences for which the blocks have widely divergent licence groups of companies.

This is common for blocks that are scattered geographically. The OGA recognises the problems that can arise from this and has undertaken not to issue any more licences covering scattered areas.

It has no objection, in principle, to splitting existing multiblock licences and will further discuss the issue but encourages consideration of the following 2 issues beforehand:. while the case for splitting more complicated multiblock licences is greater, it will be more difficult for the partners to reconcile the commercial arrangements.

in past discussions industry raised concerns about the robustness of the splitting process. As far as the OGA is aware, these are yet to be resolved. Onshore licences and landowners The Secretary of State issues landward production licences (Petroleum Exploration and Development Licences) under powers granted by the. They confer the right to search for, bore for and get hydrocarbons, but do not confer any exemption from other legal/regulatory requirements such as:.

any need to gain access rights from landowners. health and safety regulations. planning permission from relevant local authorities. In particular, nothing in part I of the Act confers, or enables the Secretary of State to confer, any right to enter on or interfere with land. However, it should also be noted that section 7(1) of the Act applies the in England, Wales and Scotland for the purpose of enabling a licensee to acquire such ancillary rights as may be required for the exercise of the rights granted by the licence. Consult the relevant map to see whether any particular site is covered by a licence (eg during house conveyancing). For further information email and include the ordnance survey coordinates of the site in question (The OGA can not identify sites using postal addresses or postcodes).

Oil & Gas Licensing Administration Department of Energy and Climate Change 3 Whitehall Place London SW1A 2AW The Supreme Court made a judgement dated 28 July 2010 in the case of Star Energy Weald Basin Limited and another (Respondents) v Bocardo SA (Appellant), which concerned issues of trespass and damages. Coal-related Hydrocarbons The manages the UK’s coal reserves and must agree to any access to coal formations for any purpose. Certain processes capture native hydrocarbons, which originate in coal seams. The use of these require permission from the Coal Authority (for access to the coal) and a licence from the OGA (for capture of the hydrocarbons).

You can go to the UK Oil Portal to (login required). To use PEARS you need a Portal account, to obtain an account follow the PEARS user guidance document below. Once you have an account, you will see a new link (Licensing Portal PEARS) on the left-hand sidebar when you enter the Portal, and clicking this link will take you into PEARS. If you need access because a registered user has added you to a case-processing team, and you already have an account, you will now be able to access the case (but nothing else in PEARS). Contacts Mike Hawkins tel: 0300 068 6038 Tracy Selby Telephone: 0300 068 6050 Email: UK Oil Portal Support Line Telephone: 0300 068 5793 Email: Introduction to PEARS PEARS is the OGA’s portal-based licence administration system. It was designed to make the administration of the OGA’s Petroleum Production Licences more efficient for industry as well as for the OGA, and to raise the confidence that can be reposed in the OGA’s records, whilst continuing to provide accustomed levels of security and confidentiality.

PEARS overview diagram The PEARS screens are designed to act as a wizard, guiding the user through the process of applying for the Secretary of State’s consent to various types of transaction. Below is a guidance document that sets out step-by-step instructions to the use of PEARS, and Info symbols throughout the PEARS screens carry context-sensitive tips about particular screen items and explanations of error messages.

There are also examples of the Consent / Rejection Letters that are issued from the PEARS system. Nic Rogers Senior Accountancy Adviser EDU Dept of Energy and Climate Change Area B 3rd Floor 3 Whitehall Place London SW1A 2AW tel: 0300 068 6049 email: Seaward Licence Extensions Production Licences can be extended beyond their original expiry dates if necessary to allow approved fields to finish their production. The OGA will not extend a licence until it is clearly necessary, so licensees expecting to need an extension should make their formal approach to the OGA between six and twelve months before their licence’s expiry date.

The OGA may request an update to the Field Development Plan to support a request for a licence extension. The OGA may refuse to extend a licence if the licensee’s performance is unsatisfactory, in terms of competence, capacity or stewardship.

An extension will be implemented by a licence amendment that removes all acreage from the licence other than the approved field(s). The extension will continue for as long as the field carries on producing. Once a licence has been extended the OGA may terminate the licence over a field if it goes a year without production; but termination is not automatic and the OGA will consider requests not to terminate on the grounds that production has only been suspended temporarily. (If there’s more than one field on a licence, the termination provisions apply separately to each field, but for the sake of simplicity this note speaks as though there’s only one.) New fields Licence expiry date is not a factor in the OGA’s consideration of a new FDP or FDP addendum.

If the OGA has approved an FDP, or if the OGA confirms that the FDP is technically and financially approvable (even though the environmental process may not have concluded), the OGA will offer the licensee a short extension to allow the new field to reach production. This extension will set a reasonable deadline for first production, based on the plans set out in the FDP, and the OGA may also add intermediate deadlines for specific waypoints on the way to production. The OGA may terminate the licence if any of these deadlines are missed.

Once first production has been reached, though, the field will be treated the same way as any other field on an extended licence. Licensees are welcome to raise individual cases of this sort with Jen Brzozowska (tel: 0300 068 6030); and any such case is likely to be raised by Jen anyway during the Fallow and General Licence Reviews.

Criteria To Become A Licensee The OGA works to maximise licensee exploitation of the nation’s petroleum resources. We believe we can best achieve this with a mix of companies – from multinational super-giants to small niche players. As production licences confer exclusive rights, we must be satisfied no licensee will block exploitation through a lack of technical or financial capacity. In addition, the Government has essential requirements, such as the establishment of a tax base. New entrants Anyone who wants to be a licensee must meet certain criteria, whether they are applying for a new licence or seeking to become a licensee by assignment. There are criteria concerning finance, residence and organisational structure.

Financial viability and financial capacity Exploiting oil and gas resources can be a very expensive business, especially offshore. The OGA will not allow anybody onto a licence if we have doubts about their ongoing financial viability or if their lack of financial capacity would prevent or impede the exploitation of the exclusive rights granted by the licence or leave them unable to meet all their liabilities and obligations to the Secretary of State. There are, therefore, financial criteria which require us to carry out full financial checks on the licensee and, where appropriate, on the corporate group to which the licensee belongs. Where a licensee has a corporate parent we may require the corporate parent to provide a parent company guarantee.

There are separate documents setting out our financial criteria and the required forms of words for parent company guarantees below:. ( PDF, 362KB, 11 pages). ( MS Word Document, 29.5KB).

( MS Word Document, 30.5KB) Corporate/Tax Issues The OGA routinely copies new assignment cases to HM Revenue & Customs (HMRC) for information. The vast majority of transactions take a form that is familiar to both the OGA and HMRC, and are not expected to raise any new tax issues; so tax is not generally a factor in the OGA’s decisions. However, the OGA does discuss tax issues with HMRC and may take them into account in any particular decision. HMRC is aware of certain commercial arrangements that would present an inherent tax risk. These include having a partnership on a licence and the assignment of a beneficial interest in a licence to somebody other than the licensee. The OGA will exercise a presumption against approving any such arrangements, though any case would be considered on its merits and the OGA is prepared to discuss proposals to address the tax issues. Residence Criteria The need to ensure a tax base also gives rise to particular residence criteria for any entity that proposes to be party to a licence.

However, the OGA doesn’t impose more onerous burdens than are necessary in particular circumstances, which means that there can be different criteria in different circumstances. In short, there is a basic position that applies to any would-be licensee, and a slightly-tighter one that applies only in a case where a producing field is concerned. To join a licence, you need to satisfy the OGA that you have a place of business within the UK. This means at least one of the following:. Having a staffed presence in the UK;.

Being registered at Companies House as a UK company; or. Having a UK branch of a foreign company registered at Companies House. To join a licence and take an interest in a producing field, you would need either:. To be registered at Companies House as a UK company; or. To carry on your business through a fixed place of business in the UK. A ‘fixed place of business’ normally means a staffed presence; refer to section 148 of the or article 5 of the for more information.

Queries should be addressed to: Nic Rogers The OGA Licensing Administration (Energy Development Unit) Tel: 0300 068 6049 Email: Equity interests and operating agreements Whenever there is more than one party to a Production Licence, the Model Clauses impose joint-and-several liability on them all. Nevertheless, for day-to-day purposes those parties will commonly enter into an agreement that apportions costs and revenues among themselves (for example, two companies agreeing a 50/50 split, often called an equity split). Such apportionment requires the Secretary of State’s consent under the model clauses. It is defined quite broadly (see, for example, Model Clause 41(5) in Sch 10 of the ). (Re-)apportionment will inevitably be a feature of many licence assignments (e.g. When a new entrant acquires a departing party’s 25% share), and the OGA will treat it as a routine part of any application for consent to an assignment.

It may, however, happen by itself (eg when 2 licence parties make a new agreement that switches them from a 50/50 split to a 75/25 split). Either way, applications for consent to apportionment should be made through the UK Oil Portal Joint operating agreements Joint Operating Agreements (JOAs) are not controlled in their own right. The creation, amendment or novation of a JOA may entail something that requires the Secretary of State’s consent – for example, it may (re)apportion licence rights or appoint an operator. If so, consent should be sought for the thing that requires it in whatever way is appropriate – via the Portal for a seaward apportionment of rights or an operator appointment, for example. If a JOA does nothing that needs consent, it needs no consent in its own right.

Operating agreements created as a result of the unitisation of a field across several different licences are usually called Unit Operating Agreements, but for the purposes of this page the same principles apply. Open permission (landward licences only) Until the OGA has migrated all its landward licences ( PEDLs, EXLs, PLs, etc) into the UK Oil Portal, some apportionments of rights granted by landward licences continue to be covered by the Open Permission (Operating Agreements).

It grants prior approval to most instances of apportionments made under landward licences. ( PDF, 481KB, 4 pages) In this context, an Open Permission is a type of approval that the Secretary of State issues once, to cover a whole class of regulated acts. It is not issued to any particular person or company and so is open to be used by anyone at any time, provided that its terms are complied with. If a company is satisfied that the Open Permission encompasses the transaction that it wants to carry out, and provided it complies with any conditions or restrictions on its use, the company can make its transaction without further individual permission from the OGA. A company cannot receive a copy of the Open Permission in its own name, and because it has already been issued nobody can apply for one. It is the responsibility of the person proposing to use an Open Permission to be sure that it covers the transaction contemplated, and to ensure the satisfaction and compliance with the permission’s provisions.

The OGA will not provide legal advice. Note that one of the conditions of use is that certain information must be sent to the OGA within 2 weeks of its use. This can be made by email to.

Where an act is already permitted under the terms of an Open Permission, the Secretary of State will not further approve it with an additional individual approval. However, where an act is excluded from the Open Permission by its conditions or restrictions, the Secretary of State can grant individual approval in response to an individual application, but generally any company seeking it should expect to have to make a special case for exceptional treatment.

The Open Permission only covers the apportionment of licence-granted rights relating to petroleum won and saved, and any proceeds of its sale. Any particular agreement may be subject to other regulatory provisions (including other controls imposed by the model clauses). In these cases it remains the responsibility of the licensee to comply with the provisions. In particular, nothing in this approval affects controls on licence assignments, operator approvals or the Petroleum Act’s decommissioning provisions.

Any queries should be addressed to: Tracy Selby Licensing Administration (Licensing and Consents Unit) Tel: 0300 068 6050 fax: 0300 068 5003 email: Charges on licences It is common practice for banks lending money to companies to demand a charge on the company’s assets as a form of collateral. Creation of a charge on a Petroleum Act licence is controlled in accordance with the model clauses attached to each licence. The open permission (creation of security rights over licenses) Any licensee wishing to create a charge should first consider the terms of the Open Permission (Creation of Security Rights over Licences) – particularly the conditions of use. ( PDF, 227KB, 1 page) Where the Open Permission has already granted consent to the creation of the charge, the licensee can do so without seeking further individual approval from the OGA. As a condition of use, the Open Permission carries an obligation to notify the OGA the following details of the charge within 10 days of its creation:. size of the loan secured. licences affected.

identity of the chargee Notification should be emailed to or to the OGA’s postal address. There is no form to complete or a prescribed format for the notification. If a borrower defaults on the loan, the lender may wish to seek enforcement of the charge to have a licence interest transferred to itself (possibly after appointing a receiver).

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This would constitute a licence assignment, which is controlled in its own right under the model clauses. Faced with a request for consent to such an assignment, the OGA would take into account all relevant factors, including the expectations of the lender.

However, the Secretary of State must exercise their discretion in each specific case, and this cannot be fettered by earlier promises to take, or not to take, a particular course of action. The OGA will also not make such promises. The Open Permission covers charges made to trustees on behalf of other financial institutions and crystallisation of a floating charge into a fixed charge. Charges under Scottish Law The OGA is aware of forms of security where the assignment of the licence to a chargee occurs at the moment the security is created (rather than later, if and when the charge should be enforced). These forms appear to be particularly relevant where a charge is to be made under Scottish law. Before creating such a charge the licensee would require the Secretary of State’s consent to the immediate assignment of his licence to the chargee, but it is difficult to envisage circumstances in which the Secretary of State could make an informed decision at that time. The Open Permission (Creation of Security Rights over Licences) was therefore reissued on 6 February 2012 to exclude from its scope the creation of security on such terms.

However, such security is very unusual among licensees so this change is not expected to have any material impact on them. This guidance reflects current policy on such security, but the OGA is prepared to discuss other ways to address concerns, either on a basis of case-by-case approval or by further changes to the Open Permission. Individual approvals Exclusion of a charge from the Open Permission should not necessarily be interpreted as a final refusal; it may be the OGA is content to grant an individual approval after careful scrutiny. We will consider requests for individual approval on receipt of a written application (to approvals@oga.gsi.gov.uk or to the the OGA postal address) that includes:. the reason why the charge is excluded from the Open Permission. information called for in the Open Permission’s notification requirement (in any particular case we reserve the right to call for other information as deemed necessary) Please address any queries to. Nic Rogers Oil & Gas Licensing Administration The OGA 3 Whitehall Place London SW1A 2AW tel: 0300 068 6049 email: Streamlined transfer and pre-emption arrangements The Master Deed The Master Deed was developed by the United Kingdom Offshore Operator Association (UKOOA) Progressing Partnership Working Group, DECC, and other interested organisations.

It aims to expedite the transfer of offshore licence interests and other agreements relating to associated assets and infrastructure, and it introduced a standard pre-emption regime to give confidence to incoming companies. Transfer arrangements Under former practice a deal was often delayed by the requirement of signatures on many different documents – even when all parties were content with arrangements. The Master Deed allows licensees to appoint an administrator to act as their attorney for the execution of proforma documents. The administrator is a specially created subsidiary of UKOOA, titled UKCS Administrator Limited. The paid-for service is provided by LOGIC on behalf of the administrator, under a separate services agreement. Use of the transfer arrangements is voluntary for the party disposing its interest. The arrangements do not affect existing rights of objection to an assignment or provisions for the granting or withholding of consents.

Pre-emption arrangements When informed of a proposed licence assignment, companies on a licence have an initial seven-day period in which to waive or reserve their rights to pre-emption. If they reserve their rights, they have 30 days to decide whether or not they want to pre-empt. Following earlier concerns from new entrants about the risk of pre-emption on new deals, these arrangements were introduced to clarify and assure buyers – particularly those that have entered into extensive and/or expensive negotiations.

Further information is available on the using the current contact details shown there. ( MS Word Document, 435KB). ( MS Word Document, 52.5KB).

The advent of the oil industry can be traced back to 1908, when a German entity, the Nigerian Bitumen Corporation, commenced exploration activities in the Araromi area, West of Nigeria. These pioneering efforts ended abruptly with the outbreak of the First World War in 1914. Oil prospecting efforts resumed in 1937, when Shell D'Arcy (the forerunner of Shell Petroleum Development Company of Nigeria) was awarded the sole concessionary rights covering the whole territory of Nigeria. Their activities were also interrupted by the Second World War, but resumed 1947. Concerted efforts after several years and an investment of over N30 million, led to the first commercial discovery in 1956 at Oloibiri in the Niger Delta. This discovery, opened up the Oil industry in 1961, bringing in Mobil, Agip, Safrap (now Elf), Tenneco and Amoseas (Texaco and Chevron respectively) to join the exploration efforts both in the onshore and areas of Nigeria.

This development was enhanced by the extension of the concessionary rights previously a monopoly of Shell, to the newcomers. The objective of the government in doing this, was to he pace of exploration and production of Petroleum. Even now more companies, both foreign and indigenous have won concessionary rights and are producing. Actual oil production and export from the Oloibiri field in present day Bayelsa State commenced in 1958 with an initial production rate of 5,100 barrels of crude oil per day.

Subsequently, the quantity doubled the following year and progressively as more players came onto the oil scene, the production rose to 2.0 million barrels per day in 1972 and a peaking at 2.4 million barrels per day in 1979. Nigeria thereafter, attained the status of a major oil producer, ranking 7th in the world in 1972, and has since grown to become the sixth largest oil producing country in the world.

CURRENT STATUS OF THE PETROLEUM INDUSTRY IN NIGERIA Sedimentary Basins Table 1, lists Nigeria's 7 main sedimentary basins with some information on size and prospectivity, main reservoirs, exploration status etc. The core producing areas cover some 60% of the total acreage of about 31,105 sq. The outlying areas remain a significant asset yet to be exploited.

Oil and Gas Reserves A 2003 estimate showed recoverable crude oil reserves at 34 billion barrels. The reserve base is expected to increase due to additional exploration and appraisal drilling. Already, over 900 million barrels of crude oil of recoverable reserves have been identified. The government has also set a target to achieve a reserve of 40 billion barrels by 2010.

Nigeria has an estimated 159 trillion cubic feet (Tcf) of proven natural gas reserves, giving the country one of the top ten natural gas endowments in the world. Due to a lack of utilization infrastructure, Nigeria still flares about 40% of the natural gas it produces and re-injects 12% to enhance oil recovery. Official Nigerian policy is to end gas flaring completely by 2008. The World Bank estimates that Nigeria accounts for 12.5% of the world's total gas flaring. Shell estimates that about half of the 2 Bcf/d of associated gas - gaseous by-products of oil extraction - is flared in Nigeria annually. The new industry strategy is to collect the associated gas and process it into liquefied natural gas (LNG), greatly enhancing Nigerian natural gas revenues while simultaneously reducing carbon dioxide emissions Oil Fields Of the 606 oil fields in the Niger Delta area, 355 are on-shore while the remaining 251 are offshore.

Of these, 193 are currently operational while 23 have been shut in or abandoned as a result of poor prospectivity or total drying up of the wells. Outside the Niger Delta, a total of 28 exploratory oil wells have been drilled all showing various levels of prospectivity as seen in Table 2. These wells include two (2) discovery wells in Anambra State, one (1) discovery well each in Edo State and Benue State each and Twenty-four (24) wells in the Chad Basin. However, production is yet to commence from any of the wells. Nigerian liquefied Natural Gas The Nigerian LNG project is being implemented in phases with an initial production from two trains. The plant is situated at Bonny Island.

NLNG has successfully secured market for its moderate production volume from its base project and train three. Sources of Gas: The bulk of the gas for base project is mainly NAG supplied from the following gas supplier fields: SPDC - SOKU; NAOC - OBIAFU OBIKROM; EPNL - OBITE; The bulk of gas for train three will contain more of associated gas from which both LNG and LPG will be produced. Gas Supply Contract: The NLNG had signed Gas Supply Agreements (GSAs) with three upstream gas producers in 1992. This is aimed at securing adequate and regular supply of gas for the project. These gas producers are: The Shell Petroleum Development Company of Nigeria Limited (SPDC) - NNPC/SPDC/NAOC/EPNL JV: operator & sellers' representative - SPDC (Shell affiliate); Nigerian Agip Oil Company limited (NAOC) - NNPC/NAOC/POCNL JV: operator & sellers' representative - NAOC (Agip affiliate); ELF Petroleum Nigerian limited (ELF), (then Elf Nigerian Limited) - NNPC/EPNL JV: operator & sellers' representative - EPNL (Elf affiliate). These three joint ventures are expected to supply the gas requirement for the project for the next 221/2 years. Gas Supply Contract Quantities: The joint venture will supply a total of 302.17 billion standard cubic metres (BSCM) of feed-gas required for the NLNG's three trains.

The feed-gas for the three trains will be a combination of associated and non-associated gas. When NLNG's train three becomes fully operational, a total of about 41.83 million standard cubic metres will be required by the plant daily. Licenses and Leases. 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.

As at February 1999, there were a total of 48 OML's and OPL's issued mainly to Joint Ventures with government participation.