Petroleum Act
Chapter P10
(Chapter 350 LFN 1990)
Laws of the Federation of Nigeria
Arrangement of Sections
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1. |
Vesting of petroleum in the State, etc. |
2. |
Oil exploration licences, oil prospecting licences and oil
mining leases |
3. |
Refineries.
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4. |
Control of petroleum products. |
5. |
Offences in connection with the distribution of petroleum
products |
6. |
Price control. |
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7. |
Rights of pre-emption.
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8. |
Power and duties of public officers. |
9. |
Regulations.
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10. |
Discharge of obligation to make payments. |
11. |
Settlement of disputes by arbitration. |
12. |
Delegation of powers.
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13. |
Offences.
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14. |
Repeals, amendments, transitional and savings provisions. |
15. |
Interpretation.
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16. |
Short title and commencement. |
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Schedules
First Schedule
Oil exploration licences, oil prospecting licences and oil mining leases
Second Schedule
Third Schedule
Fourth Schedule
Petroleum Act
Chapter P10
(Chapter 350 LFN 1990)
Laws of the Federation of Nigeria
An Act to provide for the exploration of petroleum from the territorial
waters and the continental shelf of Nigeria and to vest the ownership of,
and all on-shore and off-shore revenue from petroleum resources derivable therefrom in
the Federal Government and for all other matters incidental thereto.
27th day of November
1969
1. (1) The
entire ownership and control of all petroleum in, under or upon any lands to
which this section applies shall be vested in the State.
(2) This section applies
to all land (including land covered by water) which—
(a) is in Nigeria; or
(b) is under the territorial
waters of Nigeria; or
(c) forms part of the continental shelfs;
or
(d) forms part of the Exclusive
Economic Zone of Nigeria.
(3) In this section
references to “territorial waters” are references to the expression as
defined in the Territorial Waters Act.
2. (1) Subject
to this Act, the Minister may grant—
(a) a licence, to be known as an
oil exploration licence, to explore for petroleum;
(b) a licence, to be known as an oil
prospecting licence, to prospect for petroleum; and
(c) a lease, to be known as an oil
mining lease, to search for, win, work, carry away and dispose of petroleum.
(2) A licence or lease
under this section may be granted only to a company incorporated in Nigeria
under the Companies and Allied Matters Act or any corresponding law.
(3) The provisions of the
First Schedule to this Act shall, in so far as they are applicable, have
effect in relation to licences and leases granted under this section.
3. (1) No
refinery shall be constructed or operated in Nigeria without a licence
granted by the Minister.
(2) Licences granted under
this section shall be in the prescribed form and shall be subject to the
prescribed terms and conditions or, where no form is prescribed or no terms
or conditions are prescribed, in such form or subject to such terms and
conditions as may be decided or imposed by the Minister.
(3) There shall be charged
in respect of every licence granted under this section such application fees
and such other fees as may be prescribed.
(4) The provisions of this
section are additional to the provisions of the Hydrocarbon Oil Refineries
Act.
4.
(1) Subject to this
section, no person shall import, store, sell or distribute any petroleum
products in Nigeria without a licence granted by the Minister.
(2) Subsection (1) of this
section shall not apply in respect of—
(a) the storage, sale or
distribution of not more than 500 litres of kerosene, and such other
categories of petroleum products as may be exempted from the application of
subsection (1) of this section by the Minister by order published in the
Federal Gazette;
(b) storage of petroleum products
undertaken otherwise than in connection with the importation, sale or
distribution of petroleum products.
(3) Licences granted by
the Minister under this section shall be subject to the prescribed terms and
conditions where no form is prescribed or no terms or conditions are
prescribed, in such form and on such terms and conditions as may be decided
or imposed by the Minister.
(4) There shall be charged
in respect of every licence granted under this section application fees and
such other fees as may be prescribed.
(5) The Minister may by
order published in the Federal Gazette delegate the power to grant licences
under this section to such persons or authorities in a State as he may deem
fit.
(6) Any person who does,
without the appropriate licence, any act for which a licence is required
under this section shall be guilty of an offence and shall be liable on
conviction to imprisonment for two years or a fine of N2,000
or both, and, in addition, the petroleum products in respect of which the
offence was committed shall be forfeited.
5.
(1) If any oil marketing
company in pursuance of any agreement or arrangement between it and any
other oil marketing company borrows any petroleum products from any other
oil marketing company and fails to return to that company an equivalent
quantity of the petroleum products borrowed within two weeks of the date on
which the petroleum products were borrowed, the first-named oil marketing
company shall be guilty of an offence and on conviction shall be liable to a
fine of N100 per metric
ton of the petroleum products concerned.
(2) If any oil marketing
company at any time registers only unpumpable stock
in respect of petroleum products stored in its depot at Apapa,
Lagos, that company shall be guilty of an offence and shall on conviction be
liable to a fine ofN5,000 for each day during which only unpumpable stock
is registered.
(3) In this section, “oil
marketing company” means any company in respect of which a marketer’s
licence has been granted by the Minister under section 4 of this Act.
6. (1) The
Minister may by order published in the Federal Gazette fix the prices at
which petroleum products or any particular class or classes thereof may be
sold in Nigeria or in any particular part or parts thereof.
(2) The Minister may by
notice in writing require any person appearing to him to have or to be
likely to have access to information which is relevant to the fixing of any
prices of the kind mentioned in subsection (1) of this section to supply
that information to the Minister, and any person so required shall be
legally bound to use his best endeavours to supply the information
accordingly.
7.
(1) In the event of a
state of national emergency or war the Minister shall have the right of
pre-emption of all petroleum and petroleum products obtained, marketed or
otherwise dealt with under any licence or lease granted under this Act.
(2) The provisions of the
Second Schedule to this Act shall have effect in relation to the right
mentioned in subsection (1) of this section.
(3) Any person who,
without reasonable excuse (the burden of proof of which shall lie on him),
fails to comply with a requisition made by or on behalf of the Minister
under paragraph 1, 2 or 7 of the Second Schedule to this Act, or fails to
conform to or obey a direction issued by the Minister under paragraph 8 of
the Second Schedule to this Act, shall be guilty of an offence and on
conviction shall be liable to a fine not exceeding N2,000.
(4) Any person who
obstructs or interferes with the Minister or his servants or agents in the
exercise of the powers conferred on the Minister by paragraph 8 of the
Second Schedule to this Act shall be guilty of an offence and on conviction
shall be liable to a fine not exceeding N200
or to imprisonment for a period not exceeding six months, or to both.
(5) The Minister may, for
the purpose of subsection (1) of this section, advise the President to
declare a state of national emergency if the Minister is satisfied that, as
a result of the low level of availability of petroleum and petroleum
products—
(a) there is an actual breakdown
of public order and public safety in the Federation or any part thereof; or
(b) there is a clear and present danger
of actual breakdown of public order or public safety in the Federation or
any part thereof.
(6) The President may, on
receiving the advice of the Minister under subsection (5) of this section,
declare a state of national emergency under the provisions of the
Constitution of the Federal Republic of Nigeria 1999 for the purpose of
subsection (1) of this section, if he is satisfied that it is necessary to
do so.
8.
(1) The Minister—
(a) shall exercise general
supervision over all operations carried on under licences and leases granted
under this Act;
(b) shall report annually to the Federal
Government on the progress of the oil industry in Nigeria;
(c) shall have access at all times
to the areas covered by oil exploration licences, oil prospecting licences
and oil mining leases, and to all refineries and installations which are
subject to this Act, for the purpose of inspecting the operations conducted
therein and enforcing the provisions of this Act and any regulations made thereunder and
the conditions of any licences or leases granted under this Act or under any
corresponding law for the time being in force in Nigeria;
(d) may arrest without warrant any
person whom he finds committing, or whom he reasonably suspects of having
committed, any offence under this Act or any regulations made thereunder,
and shall hand over any person so arrested to a police officer with as
little delay as possible;
(e) may by notice in writing
require the holder of a licence or lease granted under this Act or any
contractor working for the holder (or any servant or agent of the holder or
the contractor) to appear before him at a reasonable time and place to give
such information as he may require about the operations being conducted
under the licence or lease, and every person so required to appear shall be
legally bound to comply with the notice and give the information;
(f) may direct in writing that
operations under a licence or lease granted under this Act shall be
suspended in any area until arrangements have been made which in his opinion
are necessary to prevent danger to life or property;
(g) may direct in writing the suspension
of any operations which in his opinion are not being conducted in accordance
with good oil field practice; and
(h) may direct in writing the suspension
of any operations where in his opinion a contravention of this Act or any
regulations made thereunder has
been or may have been or is likely to be committed.
(2) The Director of
Geological Survey shall have access at all times to the areas covered by oil
exploration licences, oil prospecting licences and oil mining leases for the
purpose of inspecting geophysical and geological operation therein.
9.
(1) The Minister may make
regulations—
(a) prescribing anything requiring
to be prescribed for the purposes of this Act;
(b) providing generally for matters
relating to licences and leases granted under this Act and operations
carried on thereunder,
including—
(i)
safe working;
(ii) the conservation of petroleum
resources;
(iii) the prevention of
pollution of water courses and the atmosphere;
(iv) the making of reports and returns
(including the reporting of accidents);
(v) inquiries into accidents;
(vi) the keeping and inspection of
records, books, statistics, accounts and plans;
(vii) the measurement of production; and
(viii) the measurement of crude oil delivered to
refineries;
(c) regulating the construction,
maintenance and operation of installations used in pursuance of this Act;
(d) regulating refineries and refining
operations, and, where two or more refineries are in operation, specifying—
(i)
the proportion or quantity of crude oil to be supplied to each refinery;
(ii) the share of each refinery in
the total market; and
(iii) the prices of refinery products;
(e) regulating the importation,
handling, storage and distribution of petroleum, petroleum products and
other flammable oils and liquids, and in particular (without prejudice to
the generality of the foregoing)—
(i)
prohibiting the importation or exportation of petroleum or petroleum
products except at specified ports or places;
(ii) prescribing the notice to be
given (and the person by whom the same shall be given) on the arrival at a
port of a ship carrying petroleum or petroleum products as cargo;
(iii) defining dangerous petroleum and
dangerous petroleum products, prescribing anchorages for ships carrying
dangerous petroleum or dangerous petroleum products as cargo and requiring
those ships to proceed to and remain at those anchorages;
(iv) regulating the loading, unloading,
transport within a port, landing, trans-shipment and shipment of petroleum
and petroleum products;
(v) providing for the licensing of
lighters and other craft to carry petroleum and petroleum products within a
port;
(vi) prescribing conditions and
restrictions to be imposed upon vessels arriving at a port after having
carried petroleum, petroleum products, dangerous petroleum or dangerous
petroleum products;
(vii) providing for the examination and
testing of petroleum and petroleum products, and prescribing the tests to be
applied to ascertain its flash-point and the method of applying those tests;
and
(viii) subject to subsection (2) of this section,
regulating the transport of petroleum and petroleum products, prescribing
the quantity of petroleum and petroleum products which may be carried in any
vessel, cart, truck, railway wagon or other vehicle, the manner in which
they shall be stored when being so carried, the receptacles in which they
shall be contained when being so carried and the quantities to be contained
in those receptacles, and providing for the search and inspection of any
such vessel, cart, truck, railway wagon or other vehicle;
(f) conferring or imposing on
public officers for the purposes of this Act powers and duties additional to
those conferred or imposed by section 8 of this Act;
(g) where paragraph (a) of this
subsection does not apply; prescribing—
(i)
forms to be used for the purposes of this Act; and
(ii) fees to be charged in
connection with the operation of this Act (including, without prejudice to
the generality of the foregoing, fees for the giving of any permission by
the Minister and for the supplying of any document or other material, the
carrying out of any examination and the doing of any other thing by him);
and
(h) providing for such other matters as
in his opinion may be necessary or desirable in order to give proper effect
to this Act.
(2) Regulations made under
subsection (1) (e) (viii) of this section shall apply only where petroleum
or petroleum products are being transported—
(a) on the waters mentioned in
item 36 (a) and (b) of Part I of the Second Schedule to the Constitution of
the Federal Republic of Nigeria 1999; or
(b) by railway or transport
ancillary thereto; or
(c) on trunk roads within the
meaning of item 62 of that Part of that Schedule.
10. An
obligation to pay any fees, rent, royalty, premium or other sum imposed by
or under this Act shall be discharged if, and only if, the payment is made
within the time provided by or under this Act (or, where no time is so
provided, within a reasonable time) to the Minister or his duly authorised
representative.
11. (1) Where
by any provision of this Act or any regulations made thereunder a
question or dispute is to be settled by arbitration, the question or dispute
shall be settled in accordance with the law relating to arbitration in the
appropriate State and the provision shall be treated as a submission to
arbitration for the purposes of that law.
(2) In this section “the
appropriate State” means the State agreed by all parties to a question or
dispute to be appropriate in the circumstances or, if there is no such
agreement, the Federal Capital Territory, Abuja.
12. (1) The
Minister may by writing under his hand delegate to another person any power
conferred on him by or under this Act except the power to make orders and
regulations.
(2) The Minister or the
Director of Geological Survey may by writing under his hand delegate any
power conferred on him by or under this Act to another public officer.
13. (1) Any
person who interferes with or obstructs the holder of a licence or lease
granted under section 2 of this Act (or his servants or agents) in the
exercise of any rights, power or liberty conferred by the licence or lease
shall be guilty of an offence and on conviction shall be liable to a fine
not exceeding N200 or to imprisonment for a period not exceeding six months,
or to both.
(2) Any person who—
(a) constructs or operates a
refinery in Nigeria without a licence granted under section 3 of this Act;
or
(b) in any land to which section 1
of this Act applies—
(i)
explores for petroleum without an oil exploration licence; or
(ii) prospects for petroleum
without an oil prospecting licence; or
(iii) wins or works petroleum otherwise
than in pursuance of a licence or lease granted under this Act; or
(iv) does, without the appropriate
licence, any act for which a licence is required under any regulations made
under this Act,
shall be guilty of an offence and shall be liable on conviction to a fine
not exceeding N2,000.
(3) Any person who
contravenes any provision of an order made under section 6 of this Act shall
be guilty of an offence and on conviction shall be liable to a fine not
exceeding N2,000.
(4) Where a person is
convicted of an offence under subsection (2) or (3) of this section in
respect of any petroleum or petroleum products, then, in addition to any
penalty imposed under the subsection in question, the convicting court may—
(a) order the petroleum or
petroleum products to be forfeited; or
(b) order that person to pay to the
Minister the value of the petroleum or petroleum products.
14. (1) The
enactments specified in the Third Schedule to this Act are hereby repealed
to the extent therein specified.
(2) The reference to
petroleum licence in section 140 (1) and (2) of the Minerals and Mining Act
shall be construed as including a reference to this Act.
(3) The transitional and
savings provisions in the Fourth Schedule to this Act shall have effect
notwithstanding any other provision of this Act.
15. (1) In
this Act, unless the context otherwise requires—
“barrel”
means a barrel of 42 United States gallons;
“continental shelf”
means the seabed and subsoil of those submarine areas adjacent to the coast
of Nigeria the surface of which lies at a depth no greater than 200 metres
(or, where its natural resources are capable of exploitation, at any depth)
below the surface of the sea, excluding so much of those areas as lies below
the territorial waters of Nigeria;
“crude oil”
means oil in its natural state before it has been refined or treated
(excluding water and other foreign substances);
“explore”
in relation to petroleum, means to make a preliminary search by surface
geological and geophysical methods, including aerial surveys but excluding
drilling below 91.44 metres;
“Minister”
means the Minister of Petroleum Resources;
“natural gas”
means gas obtained from boreholes and wells and consisting primarily of
hydrocarbons;
“petroleum”
means mineral oil (or any related hydrocarbon) or natural gas as it exists
in its natural state in strata, and does not include coal or bituminous shales or
other stratified deposits from which oil can be extracted by destructive
distillation;
“petroleum products”
includes motor spirit, gas oil, diesel oil, automotive gas oil, fuel oil,
aviation fuel, kerosene, liquefied petroleum gases and any lubrication oil
or grease or other lubricant;
“prospect”
in relation to petroleum, means search for by all geological and geophysical
methods, including drilling and seismic operations;
“refinery”
means petroleum refinery;
“rent”
includes any annual or other periodic charge made in respect of a licence
granted under section 2 of this Act;
“State”
except in section 1 of this Act, means a State of the Federation.
(2) References in this Act
to the Director of Geological Survey are references to the persons for the
time being holding, acting in or performing the functions of the offices so
designated in the public service of the Federation as defined in the
Constitution of the Federal Republic Nigeria 1999.
16. (1)
This Act may be cited as the Petroleum Act.
(2) This Act, except
section 6 and the Second Schedule thereof, shall come into force on 27
November 1969.
Oil exploration licences, oil prospecting licences and oil mining leases
1.
An oil exploration licence shall apply to the area specified therein which
may be any area on which a premium has not been placed by the Minister, and
shall authorise the licensee to undertake exploration for petroleum in the
area of the licence, excluding land in respect of which the grant of an oil
prospecting licence or oil mining lease has been approved by the Minister
and land in respect of which an oil prospecting licence or oil mining lease
is in force.
2. An
oil exploration licence shall not confer any exclusive rights over the area
of the licence, and the grant of an oil exploration licence in respect of
any area shall not preclude the grant of another oil exploration licence or
of an oil prospecting licence or oil mining lease over the same area or any
part thereof.
3. An
oil exploration licence shall terminate on 31 December next following the
date on which it was granted, but the licensee shall have an option to renew
the licence for one further year if—
(a) he has fulfilled in
respect of the licence, all obligations imposed upon him by this Act or
otherwise;
(b) the Minister is satisfied with
work done and the reports submitted by the licensee in pursuance of the
licence; and
(c) an application for renewal has
been made at least three months before the date of expiry of the licence.
4. An
oil exploration licence shall not confer any right to the grant of an oil
prospecting licence or an oil mining lease.
5. The
holder of an oil prospecting licence shall have the exclusive right to
explore and prospect for petroleum within the area of his licence.
6. The
duration of an oil prospecting licence shall be determined by the Minister,
but shall not exceed five years (including any periods of renewal).
7. The
holder of an oil prospecting licence may carry away and dispose of petroleum
won during prospecting operations, subject to the fulfilment of obligations
imposed upon him by or under this Act (including any special terms or
conditions imposed under paragraph 34 of this Schedule) or by the Petroleum
Profits Tax Act or any other law imposing taxation in respect of petroleum.
8. An
oil mining lease may be granted only to the holder of an oil prospecting
licence who has—
(a) satisfied all the conditions
imposed on the licence or otherwise imposed on him by this Act; and
(b) discovered oil in
commercial quantities.
9. For
the purposes of paragraph 8 of this Schedule, oil shall be deemed to have
been discovered in commercial quantities by the holder of an oil prospecting
licence if the Minister, upon evidence adduced by the licensee, is satisfied
that the licensee is capable of producing at least 10,000 barrels per day of
crude oil from the licensed area.
10.
The term of an oil mining lease shall not exceed twenty years, but may be
renewed in accordance with this Act.
11.
Subject to this Act and any special terms or conditions imposed under
paragraph 34 of this Schedule, the lessee of an oil mining lease shall have
the exclusive right within the leased area to conduct exploration and
prospecting operations and to win, get, work, store, carry away, transport,
export or otherwise treat petroleum discovered in or under the leased area.
12. (1) Ten
years after the grant of an oil mining lease, one half of the area of the
lease shall be relinquished.
(2) Paragraph 18 of this
Schedule shall apply to the relinquished area.
13. (1) The
lessee of an oil mining lease shall be entitled to apply in writing to the
Minister, not less than twelve months before the expiration of the lease,
for a renewal of the lease either in respect of the whole of the leased area
or any particular part thereof; and the renewal shall be granted if the
lessee has paid all rent and royalties due and has otherwise performed all
his obligations under the lease.
(2) Paragraph 12 of this
Schedule shall not apply in relation to a lease which has been renewed under
this paragraph.
14. Without
the prior consent of the Minister, the holder of an oil prospecting licence
or an oil mining lease shall not assign his licence or lease, or any right,
power or interest therein or thereunder.
15. The
prescribed fee shall be paid on an application for an assignment under
paragraph 14 of this Schedule and the Minister’s consent for the assignment
may be given on payment of such other fee or such premium, or both, and upon
such terms, as he may decide:
Provided that the Minister may waive payment of that other fee or that
premium, or both, if he is satisfied that the assignment is to be made to a
company in a group of which the assignor is a member, and is to be made for
the purpose of re-organisation in order to achieve greater efficiency and to
acquire resources for more effective petroleum operations.
16. The
Minister shall not give his consent to an assignment unless he is satisfied
that—
(a) the proposed assignee
is of good reputation, or is a member of a group of companies of good
reputation, or is owned by a company or companies of good reputation;
(b) there is likely to be
available to the proposed assignee (from his own resources or through other
companies in the group of which he is a member, or otherwise) sufficient
technical knowledge and experience and sufficient financial resources to
enable him to effectually carry out a programme satisfactory to the Minister
in respect of operations under the licence or lease which is to be assigned;
and
(c) the proposed assignee is in
all other respects acceptable to the Federal Government.
17. (1) The
holder of an oil mining lease may, with the consent of and on such terms and
conditions as may be approved by the President, farm out any marginal field
which lies within the leased area.
(2) The President may
cause the farm-out of a marginal field if the marginal field has been left
unattended for a period of not less than ten years from the date of the
first discovery of the marginal field.
(3) The President shall
not give his consent to a farm-out or cause the farm-out of a marginal field
unless he is satisfied—
(a) that it is in the public
interest so to do, and, in addition, in the case of a non-producing marginal
field, that the marginal field has been left unattended for an unreasonable
time, not being less than ten years; and
(b) that the parties to the farm-out are
in all respects acceptable to the Federal Government.
(4) For the purposes of
this paragraph—
“farm-out”
means an agreement between the holder of an oil mining lease and a third
party which permits the third party to explore, prospect, win, work and
carry away any petroleum encountered in a specified area during the validity
of the lease;
“marginal field”
means such field as the President may, from time to time, identify as a
marginal field.
18. (1) The
holder of an oil prospecting licence or oil mining lease may, at any time,
terminate his licence or lease by giving to the Minister not less than three
months’ notice in writing to that effect.
(2) Where notice is given
under this paragraph, no rent paid shall be refundable, and the termination
shall otherwise be without prejudice to any obligation or liability imposed
by or incurred under the licence or lease before the effective date of
termination.
19. (1) Without
prejudice to paragraph 12 of this Schedule, the holder of an oil prospecting
licence or oil mining lease shall be entitled at any time on giving three
months’ notice in writing to the Minister to surrender the licence or lease
in respect of any particular part of the licensed or leased area.
(2) Paragraphs 19 to 22 of
this Schedule shall apply where a surrender is made under this paragraph.
20. The
shape and size of the area to be retained and of the area to be relinquished
shall be approved by the Minister.
21. Subject
to the provisions of all the relevant laws and on such terms and conditions
as may be approved by the Minister, the licensee or lessee shall be entitled
to such way-leaves for the laying, operation and maintenance of pipelines,
telephones and the like through or across the surrendered area or areas as
he may reasonably require—
(a) for the carrying on of
operations under the licence or lease; or
(b) for inter-communication and
passage between retained areas (and, in the case of licences or leases in
the continental shelf, between retained areas and onshore lands),
and any such way-leaves shall form part or be included in the calculation of
the amount of the retained areas.
22. There
shall be reserved to the Minister over the retained part such way-leaves,
easements or other rights as in his opinion are necessary or desirable for
the laying, operation and maintenance of pipelines, telephone lines and
power-lines; and any way-leaves or other rights so reserved shall enure for
the benefit of any person or body to whom the Minister may subsequently
grant the same to the extent that he may so grant them.
23. No
rent paid shall be refundable, but the surrender shall otherwise be without
prejudice to any obligation or liability imposed by or incurred under the
licence or lease before the effective date of surrender.
24. (1) The
Minister may revoke any oil prospecting licence or oil mining lease if the
licensee or lessee becomes controlled directly or indirectly by a citizen
of, or subject of, or a company incorporated
in, any country which is—
(a) a country other than the
licensee’s or lessee’s country of origin; and
(b) a country the laws of which do not
permit citizens of Nigeria or Nigerian companies to acquire, hold and
operate petroleum concessions on conditions which in the opinion of the
Minister are reasonably comparable with the conditions upon which such
concessions are granted to subjects of that country.
(2) In this paragraph
“Nigerian company” means a company incorporated in Nigeria or a company
controlled directly or indirectly by citizens of Nigeria.
25. (1) The
Minister may revoke any oil prospecting licence or oil mining lease if in
his opinion the licensee or lessee—
(a) is not conducting operations—
(i)
continuously;
(ii) in a vigorous and
businesslike manner in accordance with the basic work programme approved for
the licensee or lessee; and
(iii) in accordance with good oil field
practice; or
(b) has failed to comply with any
provision of this Act or any regulation or direction given thereunder or
is not fulfilling his obligations under the special conditions of his
licence or lease; or
(c) fails to pay his due
rent or royalties, whether or not they have been demanded by the Minister,
within the period specified by or in pursuance of this Act; or
(d) has failed to furnish such reports
on his operations as the Minister may lawfully require.
(2) Paragraphs 26 to 30 of
this Schedule shall apply where there is revocation under this paragraph.
26. The
Minister shall inform the licensee or lessee of the grounds on which the
revocation is contemplated and shall invite the licensee or lessee to make
any explanation if he so desires.
27. If
the Minister is satisfied with the explanation, he may invite the licensee
or lessee to rectify the matter complained of within a specified period.
28. If—
(a) the licensee or lessee makes
no or no sufficient explanation; or
(b) does not rectify the matter
complained of within the specified period, the Minister may revoke the
licence or lease.
29. A
notice sent to the last-known address of the licensee or lessee or his legal
representative in Nigeria and published in the Federal Gazette shall, for
all purposes, be sufficient notice to him of the revocation of the licence
or lease.
30.
The revocation shall be without prejudice to any liabilities which the
licensee or lessee may have incurred, or to any claim against him which may
have accrued to the Federal Government.
31. There
shall be paid in respect of licences and leases to which this Schedule
applies such application fees as may be prescribed.
32. There
shall be paid in respect of licences and leases to which this Schedule
applies such rents as may be prescribed.
33. Royalties
shall be paid at the prescribed rates or, where rates are specified in
special terms and conditions attached to the relevant licence or lease, at
the rates so specified.
34. Licences
and leases to which this Schedule applies shall be in the prescribed form
or, where no form is prescribed, in such form as the Minister considers
suitable.
35. If
he considers it to be in the public interest, the Minister may impose on a
licence or lease to which this Schedule applies special terms and conditions
not inconsistent with this Act including (without prejudice to the
generality of the foregoing) terms and conditions as to—
(a) participation by the Federal
Government in the venture to which the licence or lease relates, on terms to
be negotiated between the Minister and the applicant for the licence or
lease; and
(b) special provisions applying to
any natural gas discovered, which provisions shall include—
(i)
the right of the Federal Government to take natural gas produced with crude
oil by the licensee or lessee free of cost at the flare or at an agreed cost
and without payment of royalty;
(ii) the obligation of the
licensee or lessee to obtain the approval of the Federal Government as to
the price at which natural gas produced by the licensee or lessee (and not
taken by the Federal Government) is sold; and
(iii) a requirement for the payment by
the licensee or lessee of royalty on natural gas produced and sold.
36. The
holder of an oil prospecting licence or oil mining lease shall—
(a) have a general right to enter
and remain on the licensed or leased lands and do such things as are
authorised by the licence or lease; and
(b) shall comply with any
enactment relating to town or country planning or regulating the
construction, alteration, repair or demolition of buildings, or providing
for similar matters, which affects him in carrying out the operations
authorised by the licence or lease.
37. The
holder of an oil exploration licence, oil prospecting licence or oil mining
lease shall, in addition to any liability for compensation to which he may
be subject under any other provision of this Act, be liable to pay fair and
adequate compensation for the disturbance of surface or other rights to any
person who owns or is in lawful occupation of the licensed or leased lands.
38. The
holder of an oil mining lease shall ensure that—
(a) within ten years from the
grant of his lease—
(i)
the number of citizens of Nigeria employed by him in connection with the
lease in managerial, professional and supervisory grades (or any
corresponding grades designated by him in a manner approved by the Minister)
shall reach at least 75% of the total number of persons employed by him in
those grades; and
(ii) the number of citizens of
Nigeria in any one such grade shall be not less than 60% of the total; and
(b) all skilled, semi-skilled and
unskilled workers are citizens of Nigeria.
39. The
holder of any licence or lease to which this Schedule applies shall at all
times indemnify and keep harmless the Federal Government, the Minister and
every officer in the civil service of the Federation or the States (and
their agents) against all actions, costs, charges, claims and demands
howsoever which may be made or brought by any third party in relation to any
matter or thing done or purported to be done in pursuance of this Act.
40. If
any fee, rent or royalty due under this Act is unpaid for a period of one
month after the date when it becomes due (whether legally demanded or not),
the Minister may, in addition to any other remedies
which may be available—
(a) enter into and upon any land,
property or premises possessed or occupied by the licensee or lessee in
connection with the licence or lease; and
(b) seize and distrain and
sell as landlords may do for rents in arrear, any petroleum, petroleum
products, engines, machinery, tools, implements or other effects belonging
to the licensee or lessee which may be found in or upon the land, property
or premises; and
(c) out of moneys arising from the
sale of the distress, retain and pay off the arrears of the said fee, rent
or royalty and also the costs and expenses incident to the distress and
sale, rendering the surplus (if any) to the licensee or lessee.
41.
(1) Failure on the part of
the holder of a licence or lease to which this Schedule applies to fulfil
any of the terms or conditions of the licence or lease shall not (except as
may be otherwise provided for in or in relation to the licence or lease)
give the Minister any claim against the licensee or lessee, or be deemed a
breach of the licence or lease, if the failure arises from causes beyond the
control of the licensee or lessee.
(2) If from any such cause
the fulfilment by any such licensee or lessee of any term or condition of
his licence or lease or of any provision of this Act is delayed, the period
of delay shall be added to the period fixed for the fulfilment of the term
or condition.
42. If
any question or dispute arises in connection with any licence or lease to
which this Schedule applies between the Minister and the licensee or lessee
(including a question or dispute as to the payment of any fee, rent or
royalty), the question or dispute shall be settled by arbitration unless it
relates to a matter expressly excluded from arbitration or expressed to be
at the discretion of the Minister.
Second Schedule
1. The
Minister shall have the right to require the holder of any licence or lease
granted under this Act (the holder in question being referred to in this
Schedule as “the licensee or lessee”)—
(a) to provide for the Federal
Government, to the extent of any refinery capacity he may have in Nigeria,
petroleum products complying with specifications given by the Minister;
(b) to deliver to any person
holding a licence to operate a refinery, such quantity and quality of crude
oil as may be specified by the Minister to the extent that the licensee or
lessee has crude oil of that quantity and quality.
2. The
licensee or lessee shall use his best endeavours to increase so far as
possible with his existing facilities the supply of petroleum or petroleum
products, or both, for the Federal Government to the extent required by the
Minister.
3. The
licensee or lessee shall, with all reasonable expedition and so as to avoid
demurrage on the vessels conveying the same, use his best endeavours to
deliver all petroleum or petroleum products purchased by the Minister under
his said right of pre-emption in such quantities, and at such places of
shipment or storage in Nigeria, as may be determined by the Minister.
4. If
a vessel employed to carry petroleum or petroleum products pursuant to
paragraph 3 of this Schedule is detained on demurrage at the port of
loading, the licensee or lessee shall pay the amount due for demurrage
according to the terms of the charter-party or the rates of loading
previously agreed by the licensee or lessee, unless the delay is due to
causes beyond the control of the licensee or lessee.
5. Any
dispute which may arise as to whether a delay is due to causes beyond the
control of the licensee or lessee shall be settled by agreement between the
Minister and the licensee or lessee or, in default of agreement, by
arbitration.
6. The
price to be paid for petroleum or petroleum products taken by the Minister
in exercise of his said right of pre-emption shall be—
(a) the reasonable value at the
port of delivery, less discounts to be agreed by both parties; or
(b) if no such agreement has been
entered into prior to the exercise of the right of pre-emption, a fair price
at the port of delivery to be settled by agreement between the Minister and
the licensee or lessee or, in default of agreement, by arbitration.
7. To
assist in arriving at a fair price for the purposes of paragraph 6 (b) of
this Schedule, the licensee or lessee shall, if the Minister so requires—
(a) furnish for his confidential
information particulars of the quantities, descriptions and prices of
petroleum or petroleum products sold to other customers and of charters or
contracts entered into for their carriage; and
(b) exhibit original or
authenticated copies of the relevant contracts or charter-parties.
8. The
Minister may take control of any works, plants or premises of the licensee
or lessee; and if he does so, the licensee or lessee and his servants or
agents shall conform to and obey all directions issued by the Minister or on
his behalf.
9. Reasonable
compensation shall be paid to the licensee or lessee for any loss or damage
caused to him by reason of the exercise by the Minister of the powers
conferred by paragraph 8 of this Schedule.
10. Any
compensation payable under paragraph 9 of this Schedule shall be settled by
agreement between the Minister and the licensee or lessee or, in default of
agreement, by arbitration.
Third Schedule
Chapter or number
|
Short title or Citation |
Extent of repeal
|
|
Cap. 120 of 1958 Laws of Nigeria |
Mineral Oils Act |
The whole Act. |
|
Cap. 121 |
Minerals Act |
The words “and mineral oils”, in section 3, together with the
words “mineral oils” in the marginal note. |
|
Cap. 150 |
Petroleum Act
|
The whole Act. |
|
Cap. 151 of 1958 Laws of Nigeria |
Petroleum Fuel Control Act |
The whole Act. |
|
1967 No 28 |
Petroleum Control Act 1967 |
Section 7. |
Fourth Schedule
1. Any
licence or lease granted under an enactment repealed by this Act shall
continue in force notwithstanding the repeal, but shall be subject to this
Act and to any regulations made thereunder except
as regards the duration of the licence or lease, the rent and royalties
payable in respect thereof and any term or condition as to which the
Minister certifies that the justice of the case requires that the term or
condition in question shall continue to be effective notwithstanding this
Act.
2.
Where a refinery constructed with the approval of the Federal Government, or
of any of its predecessors, was in operation immediately before the
commencement of this Act—
(a) it shall be the duty of the
persons in control of the refinery to apply in writing within sixty days of
the commencement of this Act (or within such further period as the Minister
may allow) to the Minister for a licence under section 3 of this Act;
(b) on receipt of the
application the Minister shall grant the licence subject to the payment of
such fees (including application fees), such rent and such conditions as he
thinks fit, if any; and
(c) section 12 (2) of this Act
shall not have effect in relation to the refinery during the said sixty days
or any such further period or, if the application is duly made, until the
application is finally disposed of.
3. (1) Any
existing operator may, within sixty days of the commencement of this Act or
within such further period as the Minister may allow, apply in writing to
the Minister for a licence under section 4 (1) of this Act or under any
regulations coming into force simultaneously with this Act, and section
16 (2) of this Act, in so far as it relates to the existing operator and to
the licence—
(a) shall not have effect during
the said sixty days or any such further period; or
(b) if such a licence is applied for
under this paragraph, have effect in relation to the applicant until his
application has been finally disposed of.
(2) In this paragraph
“existing operator”, in relation to a licence, means any person who
immediately before the commencement of this Act was carrying on with the
knowledge and approval of the Federal Government the activity regulated by
the licence.
4. (1) The
Mineral Oils (Safety) Regulations 1963 and, to the extent that they were
made under section 3 (1) of the Petroleum Act, the Petroleum Regulations
1967, shall be deemed to have been made under section 9 of this Act and may
be added to, amended, varied or revoked accordingly.
(2) The power conferred by
sub-paragraph (1) of this paragraph shall be deemed to include power to make
any modifications necessary to bring the said regulations into conformity
with the powers conferred by the said section 9.
5. A
person shall not be convicted of an offence for doing any act authorised by
a licence or lease as saved by paragraph 1 of this Schedule.
6. Within
the twelve months immediately following the commencement of this Act, the
Minister may by order in the Federal Gazette make such further transitional
or saving provisions (not inconsistent with this Schedule) as he may think
necessary or desirable.
Petroleum Act
Chapter P10
List of Subsidiary Legislation
1. Minerals
Oils (Safety) Regulations.
2.
Petroleum Regulations.
3.
Petroleum (Drilling and Production) Regulations.
4.
Petroleum Refining Regulations.
5.
Crude Oil (Transportation and Shipment) Regulations.
Preliminary
|
1. |
Short title.
|
2. |
Interpretation. |
|
|
|
3. |
Duties of licensees and lessees. |
4. |
Offences. |
|
|
Part III
Duties of managers
|
5. |
Compliance with regulations. |
6. |
Appointment of competent persons. |
7. |
Drilling and production operations. |
|
8. |
Approaches |
9. |
Moving machinery |
10 |
Hooks. |
|
11. |
Lifelines.
|
12. |
Boilers and oil treaters.
|
13 |
Internal combustion engines. |
|
14. |
Electricity.
|
15 |
Pressure vessels.
|
16. |
Tanks. |
|
17. |
Fuel storage tanks. |
18. |
Persons entering tanks, etc. |
19. |
Safe access.
|
|
20. |
Restricted areas.
|
21. |
Fire precautions |
22. |
Hydrogen sulphide. |
|
23. |
Explosives.
|
24. |
Reporting of accidents.
|
25. |
Inquiries into accidents. |
|
26. |
Publication of Regulations.
|
27. |
Offences. |
|
|
|
28. |
Competent persons. |
29. |
Safety precautions. |
30. |
Accumulation of rubbish. |
|
31. |
Safety belts, hats and boots |
32. |
Storage of loose tools in derricks.
|
33. |
Counterbalance.
|
|
34. |
Machinery guards. |
35. |
Electrical apparatus. |
36. |
Signalling equipment. |
|
37. |
Sleeping, drinking, etc., on duty. |
38. |
Endangering safety by fire.
|
39. |
Examination of plant. |
|
40. |
Other safety measures. |
41. |
Offences.
|
|
|
|
42. |
Explosives. |
43. |
Buildings.
|
44. |
Reporting unusual circumstances. |
|
45. |
Reporting of neighbouring workings |
46. |
Delegation of powers of Director of Petroleum Resources. |
47. |
Offences.
|
Deemed to be made under section 9
11th April, 1962
1. These
Regulations may be cited as the Mineral Oils (Safety) Regulations.
2.
In these Regulations, unless the context otherwise requires—
“child” or “younger person”
shall have the same meaning as is assigned to it in the Children and Young
Persons Act;
“Class ‘A’ Petroleum”
comprises all hydrocarbon liquids having a flash-point up to but not
including 73 °F by Abel closed cup test and all petroleum stocks with a
flash-point below 200 °F that are being handled at temperatures above their
flash point;
“competent person”
means a person appointed by the manager under regulation 6;
“crude oil”
means the natural product of wells or seepages of petroleum oil before such
oil has been refined or otherwise treated;
“dangerous area”
means—
(a) any enclosed premises
containing a dangerous location together with a space extending not less
than fifty feet measured along the shortest possible path in air of
flammable gases or vapour from any point of escape of such gases from such
premises; or
(b) any open premises containing
one or more dangerous locations together with a space extending not less
than fifty feet in all directions from every such dangerous location;
“dangerous atmosphere”
means an atmosphere containing any flammable gases or vapour in a
concentration capable of ignition by an open flame or electric spark;
“dangerous location”
means a location where a leakage or emission of a product which can produce
a dangerous atmosphere is normally likely to occur;
“Director of Petroleum Resources” means an officer of the Ministry of
Petroleum Resources appointed as such to exercise and perform those powers
and duties, as the case may be, as are assigned to him by these Regulations;
“gas” or “natural gas”
means gas obtained from boreholes or released from crude oil and consisting
principally of hydrocarbons;
“gas-free”
includes an absence of any concentration of combustible or toxic gases in a
vessel, container or any area below the prescribed limits;
“inspector”
means a petroleum engineer or other officer appointed in writing by the
Director of Petroleum Resources to perform any of the duties detailed in
these Regulations or in any of the licences or leases granted under the
repealed Mineral Oils Act;
“L.P.G.”
means hydrocarbon gas components comprising mainly butane or propane or
admixtures thereof capable of being condensed and stored in liquid form in
pressure vessels while gaseous at normal temperature and atmospheric
pressure;
“manager”
means the person appointed by the licensee under a licence or by the lessee
under a lease to be in charge of all operations authorised by the licence or
lease;
“pressure vessel”
means a closed vessel of any capacity subjected or which may be subjected to
an internal pressure above atmospheric;
“restricted area”
in an installation or oilfield means an area in which certain precautions
are necessary to ensure safety by reason of the possible presence of
dangerous atmosphere, or because of the operations executed therein;
“unrestricted area”
in an installation or oilfield means an area which is free from petroleum
vapour in dangerous or hazardous quantities, and in which it is safe to
accommodate boilers, open fires or flames, workshops, service buildings or
any other similar structure;
“wells”
includes every borehole drilled or sunk or in the course of being drilled or
sunk for the purpose of searching for or producing crude oil or natural gas,
and, where the context so admits, all works adjacent to or connected with
such boreholes except boreholes which shall have been reported to the
Director of Petroleum Resources as abandoned.
3. Every
licensee or lessee under a licence or lease issued under the repealed
Mineral Oils Act shall—
(a) appoint in writing a
person to be the manager who shall have continual charge of all operations
authorised by the licence or lease;
(b) notify the Director of
Petroleum Resources in writing of such appointment and of any subsequent
appointment in place of an original or later appointment;
(c)