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GEOLOGY AND PETROLEUM POTENTIALS OF NIGERIA SEDIMENTARY BASINS Introduction The Federal Republic of Nigeria has a teeming population of over 130 million people. The country has an approximate surface area of about 924,000 square kilometers comprising thirty six (36) provincial states with the Federal Capital Territorial (FCT) at Abuja. Nigeria is a democratic nation endowed with abundant human and natural resources. The main natural resources being Petroleum resources. Before the advent of Petroleum in 1950s, Nigeria was an agrarian society with ground nuts, Cocoa, Rubber etc. as the main agricultural produces. Nigeria is the most populous African nation, located in West Africa sub-region. In the South, the country is bounded by the Gulf of Guinea, North by Mali, Niger Republic and Chad in the East by Cameroun and West by Republic of Benin. Petroleum exploration in Nigeria began as far back as 1908. In 1956 the first commercial oil discovery was made at Oloibiri in the onshore Niger Delta and production of the crude oil commenced in 1958. Since that time, petroleum has played a progressively prominent role in the social and economic development of the Nigeria. Today, petroleum resources account for about 99% of the national economy. In the global scene, Nigeria is ranked 6 th in OPEC and 14 th in the World in terms of oil production. LEASE ADMINISTRATION It is pertinent to note that the deepwater blocks and inland basins in Nigeria are currently being operated by Production Sharing Contract (PSC) arrangement. The PSC trends in Nigeria since the first entrant in 1973 have been encouraging. The first PSC agreement in Nigeria Deepwater started, with the allocation of over 6,000km 2 acreage in 1991, since then the PSC areas have gradually grown to well over 50,000.00 square kilometers as at 2003. These Contract areas indeed hold the key to the realization of government’s desire of increasing the nation’s current oil reserves of 30 billion in 2003 and 40.0 billion barrels by the year 2010. The allocation of the open blocks is usually through competitive bidding in a continuous exercise. The Production Sharing Contract (PSC) and other relevant laws of the land govern the operations of the Nigeria Deepwater blocks. The fiscal regime is robust and flexible for attractive investment. Presently, in Nigeria deep-water environment, Government signed into Law, the Provisions of the 1993 PSC through the Deep Offshore and Inland Basins Production Sharing Contracts Act No 9 of 1999 and as amended to authenticate its legality and applicability to lease administration in Nigeria.
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The Department of Petroleum Resources is vested with the authority to monitor and regulate the Nigerian oil and gas industry. The Department oversees all the activities of all the companies licensed to engage in any petroleum activity in the country to ensure compliance with the terms and regulations relating to the conditions of the license.
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