Victor EzejaThe Nigerian Upstream Regulatory Commission (NUPRC), has extended the application deadline for the 2024 oil block licensing round.
This is as the Commission has also expanded the offering to include more auction of offshore oil blocks, according to a Reuters report.
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The upstream regulator had opened the auction licencing round in April initially placing a total of 19 onshore and deepwater oil blocks on offer to investors. However, with increasing interest, said the NUPRC Chief Executive, Gbenga Komolafe, the agency after further review, decided to increase the offering by adding 17 deep offshore blocks and also extend the deadline for registration by 10 days.
Komolafe said: “We have undertaken more exploratory activities and as a result acquired more data to expand the offer and extend the deadline. This has given rise to tremendous interest from investors.”
“The extension of the licensing round by including deep offshore blocks was informed by the increased exploratory activities and data acquisition which has sparked tremendous interest from investors,” he added.
In addition, he said that bids may now be submitted starting on 8 July and ending on 29 November. The objective, he said, is to maximize the utilization of Nigeria’s substantial reserves of gas and oil, which are estimated to be 209.26 trillion cubic feet of natural gas and 37.5 billion barrels of crude oil.
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According to a report released last week Tuesday by the Organisation of Petroleum Exporting Countries (OPEC), Nigeria’s crude oil production dropped to 1.25 million bpd in May. This reflects 2.34 per cent decline from the 1.28 million bpd recorded in April. This drop in oil production, no doubt has a significant impact on the government’s revenue given that oil remains a substantial contributor to the overall earnings of the country.
In its quest not to scare away investors, NUPRC reportedly slashed the entry fee also known as signature bonus from about $200 million to $10 million, while also assuring that there will be a fair and transparent bidding process.
The effort is geared towards ramping up crude oil production in the country. Looking at the trajectory of oil production in the last two years for instance, Nigeria has not been able to produce up to 2 million barrels per day (bpd) caused by a combination of factors such as sabotage in the form of vandalisation of oil facilities, theft, and spillage among others.
These issues and more have seen the International Oil Companies (IOCs) divesting their onshore assets (which are being taken over by indigenous oil and gas companies) and moving to offshore where they perceive less distraction.
Victor Ezeja is a passionate journalist with six years of experience writing on economy, politics and energy. He holds a Masters degree in Mass Communication.
