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The Nigerian Upstream Petroleum Regulatory Commission (NUPRC), with the approval of the Minister of Petroleum Resources, recently issued the Upstream Petroleum Fees and Rents (Temporary) Regulations, 2025 (the Regulations), pursuant to section 216(5) of the Petroleum Industry Act (PIA) 2021 which provides that the NUPRC may in national interest and exigent circumstances, issue a regulation without stakeholder consultation. The NUPRC considered the need for immediate clarity on rents and fees administration in the upstream sector as an urgent issue, as no public consultation was held.
8 July 25
Other Insights:
The Regulations introduce a temporary framework for determining fees and rents payable for upstream petroleum operations. The Regulations apply to all licences and leases granted or preserved under the PIA and the Petroleum Act 1969, and to any person applying for approvals, permits, or authorisations for upstream activities. The Regulations will be in force for an initial six-month period commencing on May 5, 2025, with a possible six-month extension subject to the approval of the Minister.
Key Provisions of the Regulations
Prescription of Fees and Rents
The Regulations prescribe fees and rents in two schedules:
- First Schedule
lists the application fees for licences, leases, permits, and approvals related to upstream petroleum operations, rents payable for petroleum exploration licences (PEL), petroleum prospecting licences (PPL), and petroleum mining leases (PML) based on the duration and size of licences and leases as well as premium and other rates applicable to licences and leases. - Second Schedule
Outlines fees for service licences, permits, and approvals, payable to the NUPRC. These fees cover a wide range of activities and contractor services in the upstream sector, including seismic exploration, field development plans, well operations, and environmental management.
Payment Procedures
Fees and rents in the First Schedule are paid into the Federation Account, while the fees in the Second Schedule are paid into the NUPRC’s Internally Generated Revenue accounts. The account details for payments are published on the NUPRC website. Payments must be made in advance, and force majeure events do not exempt licensees or lessees from their obligations to pay any annual fees and rents.
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Contributor
Aaron Alasa – Associate