Section 86: Duration and Renewal of Leases and Licences.

1 A petroleum mining lease granted under section 81 of this Act shall be for a maximum period of 20 years, which term shall include the development period prescribed under subsection (4).

2 Where a petroleum mining lease does not initiate regular commercial production within the stipulated development period prescribed under subsection (4), the Commission shall recommend to the Minister to revoke the lease or license at the end of the stipulated development period, unless the lessee or licensee can provide to the Commission a valid reason that in the Commission’s opinion is substantial, in which case the Commission shall recommend to the Minister to extend the development period accordingly.

3 Where a petroleum mining lease is revoked under subsection (2), the applicable acreage shall vest in the Government and be controlled and administered by the Commission, which may be subject to a new petroleum mining lease granted in accordance with section 81 of this Act.

4 The development period for a petroleum mining lease granted under section 81 of this Act shall be the period established in the field development plan under section 79 (2) (a) of this Act and where development period is not stipulated, the development period shall be—
a five years for an onshore lease; and
b seven years for a lease in shallow water or deep offshore or a lease in a frontier acreage.

5 Acreage in respect of an expired or revoked petroleum mining lease under this Act shall be subject to a new bidding process under section 73 of this Act where there is still commercial production possible, unless the term of the petroleum mining lease is extended under this Act.

6 A petroleum mining lease which continues to produce in paying quantities may be renewed by the Commission in accordance with section 87 of this Act for one or more successive additional terms, of not more than 20 years each, provided that—
a the field continues to produce in paying quantities; and
b all rents, royalties, taxes and other applicable fiscal obligations stipulated under this Act shall continue, subject to section 87 of this Act.

7 A petroleum mining lease which ceases to produce in paying quantities for a period of not less than 180 days may, except for force majeure or any other reason acceptable to the Commission, be revoked by the Commission.

8 A lessee of a petroleum mining lease who intends to suspend production for more than 180 days and to resume production at a later date, shall submit to the Commission a specific shut-in plan and a commitment to restart production in accordance with the shut-in plan.