NATURE AND TYPES OF CONCESSIONS. Black’s Law Dictionary defines a concession as a government grant for specific privileges… Concessions are contractual agreements between the government through NNPC and oil companies which permit the production, exploration, transportation, and so on of petroleum. Since Section 44(3), Section 1 PA, 1 Minerals Act, 2 PIB and so on […]
FARM-OUT ARRANGEMENTS AND MARGINAL FIELDS. Marginal fields: Where a major oil company has a concession in an oil field which does not contain a significant discovery and the field is neglected for more than 10 years, the minister may (with the requisite approval of the head of state) cause a farm-out of the oil field […]
REVERSION OF OIL AND ELECTRICITY RESIDUE. Reversionary interest connotes the right of the government to repossess title to natural resources that had initially been allocated to a corporate entity. E.g. a man lets his land to you for 3 years. After 3 years, the man can retake possession of the land. Although Section 44(3) of […]
OPEC. From the discovery of oil, the development of internal combustion engines and the need to fuel war vehicles, the demand for oil increased. The Seven Sisters (Exxon, Mobil, Texaco, Shell, Gulf, British Petroleum, Standard oil of Carlifornia) dominated the oil industry and exercised virtually sovereign rights over the oil in host countries. The Organisation […]
PROBLEMS OF THE OPEC. Disagreement between member countries: as to policies and fixing of price. This problem is compounded by the requirement of unanimity. The members comprise countries with diverse locations, ideology, religion, interest and values. Arrangements must be made to quicken decision making process. Emergence of the UK’s North Sea Oil producers. Volatility of […]
SHOULD NIGERIA CONTINUE TO BE A MEMBER OF OPEC? Arguments for Nigeria’s continued membership of OPEC: Member countries (like Nigeria) have been able to derive more revenue from export of oil and gas. The coalition of oil producing states (to form OPEC) resulted in greater bargaining power against the IOCs and the interest of member […]
The NNPC. The World War 1 and development of internal combustion engines increased the demand for oil. The first purely state owned oil company in Europe was (AGIP) Azienda Generale Italiana Petroli. Unlike private companies primarily set up to make profit. National Oil Companies were established to advance the interest and participation of the host […]
