The first petroleum exploration license under the new Petroleum Industry Act (2021) has been issued by the Federal Government to a local company, TGS-PetroData Offshore Services Limited.

The license was granted by the Nigerian Upstream Petroleum Regulatory Commission, the agency responsible for regulating the upstream sector of the oil and gas industry.

The NUPRC said the license was based on an agreement signed with TGS-PD for a geophysical survey project. 

The project involves acquiring 3D seismic and gravity data for about 56,000 square kilometers of offshore area.

The NUPRC’s Chief Executive, Gbenga Komolafe, explained that the license was not exclusive but speculative and multi-client. He said that the license allowed TGS-PD to conduct petroleum exploration operations in partnership with the NUPRC and to share the data with other interested parties.

He added that the license was a milestone for the implementation of the Petroleum Industry Act, which aims to attract investment and create value in the oil and gas sector. He said:

“Without data, reserves cannot be auctioned for development and revenue attraction. Data acquired under the PEL is not proprietary but speculative/multi-client survey data acquired in partnership with the NUPRC.” 

“The license therefore authorizes TGS-PetroData Offshore to carry out non-exclusive petroleum exploration operations on a multi-client basis within the licensed area and permits the use of the acquired 3D seismic and gravity data by exploration companies,” he said.

The Federal Government has also made progress in other aspects of the PIA implementation. Earlier this month, it issued its first wholesale gas supply license under the PIA to Ohuru Trading Limited, a local firm that will supply 500 million standard cubic feet of gas per day. 

Moreover, oil and gas operators have started to set up host communities’ development funds to benefit the local people living near oil and gas assets. 

The NUPRC also reported that Nigeria’s oil drilling rigs increased from 10 in 2022 to 31 in August 2023, leading to higher crude oil production in September 2023. Nigeria pumped 1.5 million barrels of crude oil in September, which is the highest level since January. 

Komolafe attributed the increase in oil rigs and production to the enactment of the PIA, which ended the regulatory uncertainty and encouraged investment in the fossil fuel industry. He said that before the PIA, the industry faced challenges such as energy transition and global decarbonization.