Country and political risks are key considerations for investors everywhere. Understandably, existing and potential investors in the Nigerian upstream oil and gas sector have sought clarity on the position of Nigerian law on the right of a licence/lease holder to licence/lease renewal as a basis for investing in what is traditionally a long term sector. The attached abstract, is a conceptual analysis of Nigerian law on the subject. While the position of the law is yet to be established by judicial pronouncements, the recent ruling of the court in the matter instituted by one of the majors challenging the non (delayed) renewal of its leases granting an a perpetual extension of the leases pending the application for an order of specific performance brought against the Minister in charge of Petroleum is (in the opinion of this writer) a positive indication the courts would uphold the rights of the license/lease holders to automatic renewal if they fulfill the terms of the lease.

For the time being, I can recommend this abstract as a good guide in determining the right of the license/lease holder to renewal under the Petroleum Act.

For further inquiry/engagement on the abstract, please contact me at israel.aye@sterlingpartnershipng.com

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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