PIB: Jonathan Halts Renewal of Oil Leases

This Day

8 February 2011

PIB: Jonathan Halts Renewal of Oil Leases

Efforts by International Oil Companies (IOCs) operating in Nigeria to convince the Federal Government to renew their leases before the passage of the Petroleum Industry Bill (PIB) may have been thwarted.

President Goodluck Jonathan, THISDAY learnt, has stopped further licence renewals until the bill is passed into law.

Sources at the Petroleum Ministry hinted last night that chief executives of oil giants -shell, Chevron and Total - had been lobbying the president since early last year to use his powers to renew their oil licences, which had expired since November 2008.

They were said to have intensified negotiations with the Petroleum Ministry when they sensed that the last December date for the PIB passage was not going to be feasible and had hoped to get favourable response from the president.

However, the IOCs’ moves to get their oil leases renewed ahead of the PIB passage are now virtually dashed as the president is said to have turned down their requests, insisting that oil leases could only be renewed after the passage of the PIB, which will usher in new fiscal terms.

Shell in particular had been expressing reservations on the PIB.

Last year, it filed a suit against the Federal Government over its decision to renew the leases under new terms.

The company was said to have withdrawn the action after it reached an understanding with government officials that its request would be granted if the case was discontinued.