Petroleum Licenses and Leases Quiz

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What percentage of an Oil Prospecting License must be relinquished upon conversion to an Oil Mining Lease?

25%

90%

75%

50% (correct)

What is the requirement for migration to the optional exploration period for New Petroleum Prospecting License and Petroleum Mining Leases?

Submission of a detailed report on the prospecting area

Conducting an environmental impact assessment

Payment of a non-refundable fee

Fulfilling minimum work programme of drilling on exploration well at the initial period (correct)

What happens to areas of non-interest at the grant of a Petroleum Mining Lease?

They are kept by the licensee

They are transferred to another lease

They are put up for auction

They are relinquished (correct)

What is the condition for relinquished areas?

They must be bordering, and not separated from each other Signup and view all the answers

What is required for a license or permit holder to assign or transfer their license or permit?

The Commission's prior written consent Signup and view all the answers

What happens 10 years into the life of an Oil Mining Lease?

50% size relinquishment is required Signup and view all the answers

What is the minimum percentage of the total area that a holder can select for conversion of an OPL to OML?

40% Signup and view all the answers

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% Signup and view all the answers

What is the purpose of the Midstream and Downstream Gas Infrastructure Fund?

To invest in midstream and downstream gas infrastructure in host communities Signup and view all the answers

What is the main objective of the Domestic Gas Delivery Obligation?

To promote gas development for domestic utilization Signup and view all the answers

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 Signup and view all the answers

What is required for approval of natural gas supply for export projects?

Prior compliance with the Domestic Gas Delivery Obligation Signup and view all the answers

What is the purpose of the Domestic Crude Supply Obligation?

To guarantee feedstock supply to local refineries Signup and view all the answers

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 Signup and view all the answers

What determines the volume of natural gas to be dedicated towards meeting the requirements of the domestic market?

The Commission Signup and view all the answers

Who determines the wholesale customer for natural gas delivery?

The Domestic Gas Aggregator Signup and view all the answers

What is the purpose of the Authority establishing a tariff methodology?

To implement transparent pricing principles for monopoly infrastructure Signup and view all the answers

What will the Authority require for acquiring interest in other licenses?

Commission consent Signup and view all the answers

What is the purpose of the Authority implementing the no transfer pricing principle?

To prevent price manipulation among licensed activities Signup and view all the answers

What will the Authority develop for gas and petroleum liquids?

Network codes Signup and view all the answers

What is the principle of pricing that is based on transparent costs?

Cost-reflective Signup and view all the answers

What is the purpose of the Authority's Consumer Protection principle?

To protect the interests of consumers Signup and view all the answers

What is the purpose of the Authority's Separation of Licensed Activities principle?

To separate licensed activities by Management, Accounting, and Legal entities Signup and view all the answers

What is the purpose of the Authority's Public Service Obligation principle?

To ensure public service obligations are met Signup and view all the answers

Who will act as the supplier of last resort for six months from the effective date?

NNPC Limited Signup and view all the answers

What is the purpose of the Customer service codes and Service charter?

To respond to metering emergencies Signup and view all the answers

What will be the basis of the price calculated by the domestic gas aggregator?

Prices determined by the Authority Signup and view all the answers

Who will bear the cost of service?

The Federation Signup and view all the answers

What is the role of the Authority in relation to competition regulation?

To establish guidelines to protect against monopoly Signup and view all the answers

What is the purpose of the transition plan developed by the Authority?

To achieve full market prices Signup and view all the answers

Who will develop tariff methodology?

Licensees Signup and view all the answers

What is the purpose of the Authority's social development obligations?

To contribute to economic development Signup and view all the answers

Who is responsible for overseeing the control and direction of the decommissioning and abandonment fund?

The Commission or the Authority Signup and view all the answers

What is the primary purpose of the decommissioning and abandonment fund?

To pay for decommissioning and abandonment costs Signup and view all the answers

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 Signup and view all the answers

What is the purpose of the reasonable cost estimate?

To determine the yearly amount to be contributed to the fund Signup and view all the answers

What is required of the financial institution holding the decommissioning and abandonment fund?

It must not be an affiliate of the licensee or lessee Signup and view all the answers

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 Signup and view all the answers

What is the decommissioning and abandonment fund held in?

An escrow account Signup and view all the answers