Petroleum Licenses and Leases Quiz
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Questions and Answers

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?

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

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

    <p>The Commission's prior written consent</p> Signup and view all the answers

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

    <p>50% size relinquishment is required</p> 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?

    <p>40%</p> 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?

    <p>They can select additional area up to 40%</p> Signup and view all the answers

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

    <p>To invest in midstream and downstream gas infrastructure in host communities</p> Signup and view all the answers

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

    <p>To promote gas development for domestic utilization</p> Signup and view all the answers

    Under what circumstances can a lessee avoid penalty for failing to meet the domestic gas delivery obligation?

    <p>If the lessee demonstrates force majeure or buyer failure to take or pay for gas</p> Signup and view all the answers

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

    <p>Prior compliance with the Domestic Gas Delivery Obligation</p> Signup and view all the answers

    What is the purpose of the Domestic Crude Supply Obligation?

    <p>To guarantee feedstock supply to local refineries</p> Signup and view all the answers

    What is the penalty for failing to comply with the domestic gas delivery obligation?

    <p>A penalty shall be incurred if the lessee fails to comply</p> Signup and view all the answers

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

    <p>The Commission</p> Signup and view all the answers

    Who determines the wholesale customer for natural gas delivery?

    <p>The Domestic Gas Aggregator</p> Signup and view all the answers

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

    <p>To implement transparent pricing principles for monopoly infrastructure</p> Signup and view all the answers

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

    <p>Commission consent</p> Signup and view all the answers

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

    <p>To prevent price manipulation among licensed activities</p> Signup and view all the answers

    What will the Authority develop for gas and petroleum liquids?

    <p>Network codes</p> Signup and view all the answers

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

    <p>Cost-reflective</p> Signup and view all the answers

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

    <p>To protect the interests of consumers</p> Signup and view all the answers

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

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

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

    <p>To ensure public service obligations are met</p> Signup and view all the answers

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

    <p>NNPC Limited</p> Signup and view all the answers

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

    <p>To respond to metering emergencies</p> Signup and view all the answers

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

    <p>Prices determined by the Authority</p> Signup and view all the answers

    Who will bear the cost of service?

    <p>The Federation</p> Signup and view all the answers

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

    <p>To establish guidelines to protect against monopoly</p> Signup and view all the answers

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

    <p>To achieve full market prices</p> Signup and view all the answers

    Who will develop tariff methodology?

    <p>Licensees</p> Signup and view all the answers

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

    <p>To contribute to economic development</p> Signup and view all the answers

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

    <p>The Commission or the Authority</p> Signup and view all the answers

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

    <p>To pay for decommissioning and abandonment costs</p> Signup and view all the answers

    How is the yearly amount to be contributed to the decommissioning and abandonment fund determined?

    <p>Based on a reasonable estimate of the applicable decommissioning and abandonment costs</p> Signup and view all the answers

    What is the purpose of the reasonable cost estimate?

    <p>To determine the yearly amount to be contributed to the fund</p> Signup and view all the answers

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

    <p>It must not be an affiliate of the licensee or lessee</p> 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?

    <p>The Commission or Authority appoints an independent assessor</p> Signup and view all the answers

    What is the decommissioning and abandonment fund held in?

    <p>An escrow account</p> Signup and view all the answers

    Who is responsible for managing the decommissioning and abandonment fund?

    <p>The licensee or lessee</p> Signup and view all the answers

    The Midstream and Downstream Gas Infrastructure Fund receives fines related to downstream operations.

    <p>False</p> Signup and view all the answers

    The Domestic Gas Delivery Obligation aims to promote gas development for export.

    <p>False</p> Signup and view all the answers

    A lessee who fails to comply with the domestic gas delivery obligation can be penalized.

    <p>True</p> Signup and view all the answers

    A lessee can be penalized for failing to meet its gas delivery obligation if it can demonstrate force majeure.

    <p>False</p> Signup and view all the answers

    Approval for the supply of natural gas for export projects is not subject to prior compliance with the domestic gas delivery obligation.

    <p>False</p> Signup and view all the answers

    The Domestic Crude Supply Obligation aims to guarantee feedstock supply to local refineries to support refining decline.

    <p>False</p> Signup and view all the answers

    The purpose of the Midstream and Downstream Gas Infrastructure Fund is to invest in downstream gas infrastructure in the host communities.

    <p>False</p> Signup and view all the answers

    The Commission determines the wholesale customer for natural gas delivery.

    <p>False</p> Signup and view all the answers

    A lessee can assign or transfer their license or permit without any conditions.

    <p>False</p> Signup and view all the answers

    The Domestic Gas Delivery Obligation promotes gas development for domestic utilization to fuel economic decline.

    <p>False</p> Signup and view all the answers

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