Nigeria 2019 licence renewals: 18 billion boe at stake

Thirty oil mining leases (OMLs) located onshore Nigeria are due to expire in June 2019. This includes 17 Shell JV licences. OML holders are entitled to a 20-year renewal but will have to pay a fee under special terms and conditions set by the Minister of Petroleum Resources. Although this sounds straightforward, some previous IOC renewals took over five years to complete. Therefore, protracted negotiations that last well beyond licence expiry are likely to bring operators and lenders out in a cold sweat. No one likes to risk multi-million dollar investments on acreage in legal limbo. With 18 billion boe, or a third of Nigeria's remaining reserves at stake, these renewals are vital for future investment. We assess the renewal process, the potential impact on value, and explain why the 2019 presidential election will affect the outcome.