50 Questions
What percentage of an Oil Prospecting License must be relinquished upon conversion to an Oil Mining Lease?
50%
What is the requirement for migration to the optional exploration period for New Petroleum Prospecting License and Petroleum Mining Leases?
Fulfilling minimum work programme of drilling on exploration well at the initial period
What happens to areas of non-interest at the grant of a Petroleum Mining Lease?
They are relinquished
What is the condition for relinquished areas?
They must be bordering, and not separated from each other
What is required for a license or permit holder to assign or transfer their license or permit?
The Commission's prior written consent
What happens 10 years into the life of an Oil Mining Lease?
50% size relinquishment is required
What is the minimum percentage of the total area that a holder can select for conversion of an OPL to OML?
40%
What can a holder do if the selected area for conversion is less than 40% of the total area?
They can select additional area up to 40%
What is the purpose of the Midstream and Downstream Gas Infrastructure Fund?
To invest in midstream and downstream gas infrastructure in host communities
What is the main objective of the Domestic Gas Delivery Obligation?
To promote gas development for domestic utilization
Under what circumstances can a lessee avoid penalty for failing to meet the domestic gas delivery obligation?
If the lessee demonstrates force majeure or buyer failure to take or pay for gas
What is required for approval of natural gas supply for export projects?
Prior compliance with the Domestic Gas Delivery Obligation
What is the purpose of the Domestic Crude Supply Obligation?
To guarantee feedstock supply to local refineries
What is the penalty for failing to comply with the domestic gas delivery obligation?
A penalty shall be incurred if the lessee fails to comply
What determines the volume of natural gas to be dedicated towards meeting the requirements of the domestic market?
The Commission
Who determines the wholesale customer for natural gas delivery?
The Domestic Gas Aggregator
What is the purpose of the Authority establishing a tariff methodology?
To implement transparent pricing principles for monopoly infrastructure
What will the Authority require for acquiring interest in other licenses?
Commission consent
What is the purpose of the Authority implementing the no transfer pricing principle?
To prevent price manipulation among licensed activities
What will the Authority develop for gas and petroleum liquids?
Network codes
What is the principle of pricing that is based on transparent costs?
Cost-reflective
What is the purpose of the Authority's Consumer Protection principle?
To protect the interests of consumers
What is the purpose of the Authority's Separation of Licensed Activities principle?
To separate licensed activities by Management, Accounting, and Legal entities
What is the purpose of the Authority's Public Service Obligation principle?
To ensure public service obligations are met
Who will act as the supplier of last resort for six months from the effective date?
NNPC Limited
What is the purpose of the Customer service codes and Service charter?
To respond to metering emergencies
What will be the basis of the price calculated by the domestic gas aggregator?
Prices determined by the Authority
Who will bear the cost of service?
The Federation
What is the role of the Authority in relation to competition regulation?
To establish guidelines to protect against monopoly
What is the purpose of the transition plan developed by the Authority?
To achieve full market prices
Who will develop tariff methodology?
Licensees
What is the purpose of the Authority's social development obligations?
To contribute to economic development
Who is responsible for overseeing the control and direction of the decommissioning and abandonment fund?
The Commission or the Authority
What is the primary purpose of the decommissioning and abandonment fund?
To pay for decommissioning and abandonment costs
How is the yearly amount to be contributed to the decommissioning and abandonment fund determined?
Based on a reasonable estimate of the applicable decommissioning and abandonment costs
What is the purpose of the reasonable cost estimate?
To determine the yearly amount to be contributed to the fund
What is required of the financial institution holding the decommissioning and abandonment fund?
It must not be an affiliate of the licensee or lessee
What happens if the Commission or Authority is not satisfied with the assessment and financial contribution referred to in this section?
The Commission or Authority appoints an independent assessor
What is the decommissioning and abandonment fund held in?
An escrow account
Who is responsible for managing the decommissioning and abandonment fund?
The licensee or lessee
The Midstream and Downstream Gas Infrastructure Fund receives fines related to downstream operations.
False
The Domestic Gas Delivery Obligation aims to promote gas development for export.
False
A lessee who fails to comply with the domestic gas delivery obligation can be penalized.
True
A lessee can be penalized for failing to meet its gas delivery obligation if it can demonstrate force majeure.
False
Approval for the supply of natural gas for export projects is not subject to prior compliance with the domestic gas delivery obligation.
False
The Domestic Crude Supply Obligation aims to guarantee feedstock supply to local refineries to support refining decline.
False
The purpose of the Midstream and Downstream Gas Infrastructure Fund is to invest in downstream gas infrastructure in the host communities.
False
The Commission determines the wholesale customer for natural gas delivery.
False
A lessee can assign or transfer their license or permit without any conditions.
False
The Domestic Gas Delivery Obligation promotes gas development for domestic utilization to fuel economic decline.
False
Test your knowledge of oil prospecting licenses, oil mining leases, and relinquishment provisions in the Petroleum Act.
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