Section 94: Marginal Field.

1 A producing marginal field shall be allowed to continue to operate under the original royalty rates and farm out agreements, but shall convert to a petroleum mining lease under this Act, with terms applicable under sections 267 (b), 302, and other provisions under the Act within 18 months from the effective date.

2 A discovery declared as a marginal field prior to 1st January, 2021 and is not producing shall be converted to petroleum prospecting licence and shall benefit from the terms for new acreage under Chapter 4 of this Act.

3 Where the discovery has been transferred to Government, the Commission is entitled to offer the petroleum prospecting licence in a bid round under section 74 of this Act.

4 Within three years of the effective date, any marginal field that has not been transferred to Government, shall be subject to the following process and the holder of the oil mining lease—
a present a field development plan for the marginal field;
b with the consent of the Commission and on terms and conditions as the Commission may approve under regulations, farm out the discovery; or
c relinquish the field in accordance with the provisions of this Act.

5 The consent of the Commission to the farm-out of a marginal field under subsection (4) (b) shall, amongst others, be subject to the farmee presenting a field development plan over a period of time agreed with the Commission and a regulation made under this Act.

6 The failure to present a field development plan under section 94(4) (a) of this Act or within the time frame specified under section 94 (5) of this Act shall require the relinquishment of the marginal field.

7 A marginal field relinquished under subsection (4) (c) or (6) shall be vested in the Government and be administered by the Commission.

8 For the purpose of this section—
a "marginal field" means a field or discovery which has been declared a marginal field prior to 1st January 2021 or which has been lying fallow without activity for seven years after its discovery prior to the effective date; and
b “farm-out” means an agreement between the holder of a petroleum mining lease or petroleum prospecting licence and a third party, which permits the third party to explore, prospect, win, work and carry away any petroleum encountered in a licence or lease area during the validity of the licence or lease.

9 No new marginal fields shall be declared under this Act.