Minister of State for Petroleum Resources (Oil) Senator Heineken Lokpobiri has said that the 19 oil blocks put forward for sale under the 2024 bidding round are not for politicians, but for for investors with financial capacity and technical competence. Senator Lokpobiri said in the past the award of oil blocks resulted in the non-development of over 90 per cent of marginal fields, thus denying the nation of reaping the benefits because such awards were not based on technical and financial considerations. Speaking at the ongoing 2024 Offshore Technology Conference, OTC, in Houston, Texas, the Minister said that over 90 percent of marginal fields have been left idle because those who acquired them cannot develop them.
According to him, “We have noticed a lot of idle blocs and little or no investment done on them in the last three years of acquiring them. Currently, over 90 percent of owners of these oil blocks are seeking renewal without commencing or investing in them. In this regard, we are saying no more to that and hence those seeking blocks must be financially and technically capable of turning them around and not mere portfolio investors. These set of investors are those we consider as men and not boys in the industry. The blocks are not for politicians. So, we are downplaying that kind of investors in this new bid round. However, we have taken away the 200 million signature bonus tied to block ownership. What we have tried to achieve is to tie such to operations and investment which will encourage investors and drive investment speedily on a field.
“I have worked closely with the Nigerian Upstream Petroleum Regulatory Commission, NUPRC to ensure that we achieve a seamless transition and bid round sales this year.” Similarly, the Commission Chief Executive, NUPRC, Engr. Gbenga Komolafe, said the recent Presidential Executive Orders issued in March this year, were aimed at improving the efficiency and attractiveness of Nigeria’s oil and gas sector, adding that it would culminate in further increasing the nation’s oil and gas reserves, currently standing at 37.5 Billion barrels of Crude Oil and Condensate Reserves and 209.26 Trillion Cubic Feet of Natural Gas Reserves. According to him, “The exercise, which was initially announced on the 29th of April 2024, is a significant leap in our strategic hydrocarbons development initiative. This round introduces twelve meticulously selected blocks across diverse geological spectra from the fertile onshore basins to the promising continental shelves and the untapped depths of our deep offshore territories. Each block has been chosen for its potential to bolster our national reserves and stimulate economic vitality.
“Our approach is underpinned by the robust legal framework of the Petroleum Industry Act 2021(PIA), which ensures compliance with best practices to boost investors’ confidence. In keeping with the provisions of the PIA and regulations made under the Act, the Commission has issued a licensing round guideline and published a licensing round plan for the twelve blocks (namely PPL 300-CS; PPL 301-CS; PPL 3008; PPL 3009; PPL 2001; PPL 2002; PML 51; PPL 267; PPL 268; PPL 269; PPL 270; and PPL 271). In addition to these blocks, the seven deep offshore blocks from the 2022 Mini-Bid Round Exercise which cover an area of approximately 6,700 km2 in water depths of 1,150m to 3,100m shall also be concluded along with this Licensing round. To ensure the seamlessness of the Licensing Round exercise, the NUPRC, in collaboration with our National Data Repository and multi-client partners, guarantees access to comprehensive and high-quality geological data, facilitating informed decision-making and strategic investments. The blocks on offer have extensive 2D and 3D seismic data coverage, including multi-beam and analog data. Additionally, a 3D reprocessed Pre-stack Time Migration of remarkable quality is also available to prospective bidders.
“The availability of advanced seismic datasets and analytical tools via our dedicated portals exemplifies our commitment to excellence and technological advancement. Distinguished Investors and Industry Captains and Stakeholders, the Licencing Round is indeed expected to be a huge success for Nigeria and is a big step towards growing the nation’s oil and gas reserves through aggressive exploration and development efforts, boosting production, expanding opportunities for gas utilisation and end to end development across the value chain, strengthening energy security and economy, providing an occasion to gainfully engage the pool of competent companies in the oil & gas sector with a multiplier effect in employment opportunities, enabling the transfer of technology, valorising petroleum assets in the Nigerian Territory and attracting investments. In addition, the Licensing Round presents us with the opportunity to reinforce Nigeria’s commitment to openness and transparency in line with the principles of the Extractive Industry Transparency Initiative (EITI).
“On the global scale, the Licensing Round will no doubt be beneficial to all stakeholders and will in the long run contribute to long-term global energy sufficiency. Interestingly, the Licensing Round process was formulated in cognisance of global energy sustainability goals.” On her part, the Managing Director, Shell Nigeria Exploration and Production Company Limited (SNEPCo), Elohor Aboni, disclosed Shell does not intend to leave Nigeria. She said the company is globally shifting from oil to gas while focusing on the development of its deep offshore oil and gas assets.
