Section 79: Commercial Discovery and Field Development Plan.

1 Where a licensee under a petroleum prospecting licence declares a commercial discovery under section 78 (8) (a) of this Act, the licensee shall within two years of the declaration, submit to the Commission a field development plan with regard to the commercial discovery together with a commitment to carry out the work described in the field development plan.

2 The Commission shall evaluate the technical and commercial terms of the field development plan and shall only approve the field development plan where—
a it meets the technical standards required for petroleum operations based on good international petroleum industry practices;
b the location of the measurement point, measurement processes and equipment are acceptable to the Commission;
c it results in the maximum economic recovery of crude oil, natural gas and condensates from the applicable reservoirs;
d it meets the health, safety and environmental standards, as determined by the Commission;
e it provides for the efficient and commercial use of facilities for midstream petroleum operations;
f it does not involve excessive capital or operating expenditures;
g it includes an approved Nigerian content plan pursuant to the Nigerian Oil and Gas Industry Content Development Act;
Act No 2. 2010.
h it includes an environmental management plan in a form that complies with section 102 of this Act;
i it includes a decommissioning and abandonment plan and a decommissioning and abandonment fund that complies with sections 232 and 233 of this Act;
j it provides for the elimination of routine natural gas flaring;
k it does not relate to upstream petroleum operations that are in conflict with domestic gas delivery obligation;
l it includes—
(i) a detailed programme for the recruitment and training of Nigerians in all phases of petroleum operations handled directly by the licensee or through agents and contractors of the licensee, and
(ii) provision for scholarship schemes, internships, continuous professional development and other training requirements;
m it complies with the obligations to host communities under Chapter 3 of this Act; and
n it includes a development period sufficient to construct any required infrastructure and the development of the field.

3 Where the development of a commercial discovery requires construction of facilities for midstream petroleum operations in a manner integrated with the upstream petroleum operations, a licensee may submit the development plan as a single integrated project, which may be reviewed by the Commission.

4 Where a single integrated project is submitted, the Commission shall review and implement the project based on its regulatory responsibilities.

5 Where a licensee does not submit a field development plan and work commitment within the period set forth in subsection (1), the area containing the commercial discovery shall be relinquished.

6 Where the licensee has submitted a field development plan for the field, the licence shall continue until the process for the grant of a lease has been completed or the Commission has decided not to grant the lease.

7 Where the licensee establishes and secures approval for an appraisal area or declares a commercial discovery, a petroleum prospecting licence shall, where required, be extended until the-
a grant of the petroleum mining lease; or
b decline of the approval for the appraisal area or commercial discovery.

8 Notwithstanding the provisions of section 78 (10) of this Act, the holder of the retention area shall within two years after declaring a commercial discovery, submit to the Commission a field development plan that complies with the requirements in subsection (2).

9 The Commission shall give its final decision to approve or disapprove a field development plan within 180 days after the submission of the field development plan in compliance with the requirements in subsection (2) and a lease shall be granted upon the approval of the field development plan.

10 Where the Commission fails to respond to the field development plan within 180 days, the plan shall be deemed approved.

11 A commitment by a licensee under this section shall be supported by a bank guarantee, letter of credit or performance bond issued by a bank acceptable to the Commission for an amount determined by the Commission.

12 Upon approval of a field development plan, no material modification shall be made except in accordance with the approval provisions set out in subsection (2) and the submission and approval of an amended field development plan.

13 Upon the granting of one or more petroleum mining leases, the annual work program and status report referred to under section 78 (17) of this Act shall include the program and report for each lease.

14 A field development plan may be submitted in phases, with the detailed provisions under subsection (2) relating to the first phase and the possible subsequent phases described on a high level basis, with approval being sought only for the first phase and amended field development plan needs to be presented for each following phase where the lessee is willing to commit to such following phase.