Section 81: Petroleum Mining Leases.

1 A petroleum mining lease shall be granted for each commercial discovery of crude oil or natural gas or both, to the licensee of a petroleum prospecting licence who has—
a satisfied the conditions imposed on the licence or the licensee under this act; and
b received approval for the applicable field development plan from the Commission.

2 A petroleum mining lease shall be granted under sections 70 (2) and 74 of this Act, where a prospective lease area contains petroleum field with suspended wells or continuing commercial production, where the corresponding petroleum mining lease has been revoked or has expired.

3 A petroleum mining lease granted under subsection (2) may include an appraisal phase and the development and production of the field may include a work program requirement to enhance ongoing production.

4 A licensee shall subject to subsection (7), propose that a separate petroleum mining lease be granted for each commercial discovery to which a petroleum prospecting licence relates prior to the expiration of the applicable petroleum prospecting licence.

5 Notwithstanding any grant of a petroleum mining lease under subsection (4), the applicable petroleum prospecting licence shall continue for the remaining area to which that licence relates for the duration provided for in that licence.

6 The area to which a petroleum mining lease relates and derived from a petroleum prospecting licence shall be proposed by the licensee, based on an independent engineering report, which shall not be binding on the Commission.

7 The Commission shall approve the proposed area, which shall contain every parcel within the outer boundary of the field based on oil-water contacts, spill point, intersection of planned development wells with the reservoirs or other reservoir limits, including a zone surrounding the boundary consisting of all parcels that are in whole or in part within one kilometre of such outer boundary, provided that such area shall not contain parcels—
a outside the original licence area from which the lease is derived;
b in areas relinquished by the licensee; or
c in an existing petroleum mining lease.

8 The Commission may approve modification of an area of a petroleum mining lease to include further parcels as are appropriate, based on the criteria prescribed under subsections (6) and (7), where during the period provided for in a petroleum prospecting licence, the outer boundary of the commercial discovery changes due to further—
a drilling or other exploration activities; or
b petroleum discoveries in deeper or shallower formations.

9 Where two or more petroleum mining leases derived from the same petroleum prospecting licence constitute a single field based on an interpretation by the Commission of geological or petroleum engineering data showing that the field is a single field, the leases shall be considered as a single lease, notwithstanding that their boundaries do not join with another lease, provided the granting date of the single lease shall be the date of the first lease that was granted.

10 A petroleum mining lease shall not consist of an area that is less than one parcel or where a parcel has been subdivided under section 69 (5) of this Act, less than one subdivision of such parcel.

11 Notwithstanding the provisions of this section, a petroleum mining lease may also be granted under sections 74 (3) and 93 of this Act.

12 Where a lessee makes a separate commercial discovery underneath the area of a petroleum mining lease in shallower or deeper formations, the lessee may present a development plan for such discovery and upon approval of such plan the lessee shall be granted a separate lease for such commercial discovery.