FG commences pre-bid exercise for seven new oil blocs

The Federal Government yesterday, urged local and foreign investors to invest and take advantage of the generous regulatory and fiscal regime in the upstream petroleum sector through the seven new deep offshore oil blocs to boost oil and gas production and generate revenue for the government.

The seven offshore blocs for offer are Petroleum Prospecting Licences (PPL) 300, 301, 302, 303, 304, 305 and 306 deep offshore blocs, covering an area of approximately 6700km and a water depth of 1150 to 3100 metres.

The government also stated that it has engaged the services of Wood Mackenzie to drive the 2022/23 oil bid round, in a bid to guide the process and ensure openness and transparency.

The Mini Bid Round is a market-driven programme expected to outperform the last bid round which was held in April 2007 during which a total of 45 blocks were put on offer under a different regulatory regime (the Petroleum Act, 1969).

Inventors gathered at the Nigeria Upstream Petroleum Regulatory Commission (NUPRC) Pre-Bid Conference for 2022-2023 Mini Bid Round held in Lagos, with the theme: “Growing upstream investment through licensing round the bid process and opportunities.”

The Minister of State for Petroleum Resources, Timpre Sylva, said hydrocarbons encountered in these seven offshore blocs will significantly contribute in boosting the country’s oil reserves and ensuring continuous energy sufficiency.

Sylva, who was represented by the Permanent Secretary of the ministry, Gabriel Tanimu Aduda, said one of the key mandates of the ministry of petroleum resources is to get results from the current 37-40 billion barrels of oil by 2025.

He said the PIA 2021 provided the regulatory support and framework for achieving this mandate by providing fiscal terms, which industry players and operators can utilise and deploy world-class cutting edge technologies for exploration offshore.

The minister said the pre-bid conference is coming on the heels of the recently concluded ground breaking ceremony of the prospecting oil licenses 809/810 PPL, which provides another opportunity for discussing energy transition and climate change.

“Nigeria has echoed its commitment to develop its abundant petroleum resources especially gas with proven reserves of over 200 trillion cubic feet, which require development with focused exploration. These reserves can go up to 600 trillion cubic feet.

“This is one of the drivers of this pre-bid conference and we believe more open blocs will be on offer shortly for all investors, especially the deepwaters of Nigeria,” he said.

According to him, this will lead to further growth and development of the sector and even create jobs for the youth population.

Chief Executive, NUPRC, Gbenga Komolafe, said the bid rounds are within the context of the commission’s enhanced legal and regulatory framework as enshrined in section 73 of the PIA 2021 that seeks to encourage new investors and investments in the next phase of oil and gas exploration in Nigeria.

He assured that the entire bid process in pursuant to the provision of the PIA 2021, and attendant regulations, will be fair, transparent and competitive in line with best practices.

“The blocks on offer have extensive 2D and 3D seasoning data coverage, including multiviewing and analogue data. Additionally, 3D legal serving blocks, reprocessed with start time migration of remarkable quality is also available to prospective bidders.

“Furthermore, the mini bid exercise has been designed to attract competent investors from across the world, but local and foreign that have the capability and competence in operating the deep water environment,” he said.

He noted that the oil blocks will boost production, expand opportunities for gas declaration and development, strengthen energy security and economy, provide opportunities to gainfully engage the pool of competent companies in the oil and gas sector for a soften employment opportunities.

He added that it will also enable transfer of technology, valorising petroleum assets in the Nigerian territory and attracting investments.

Executive Commissioner, Exploration and Acreage Management, NUPRC, Rose Ndong, said the ongoing licensing bid is significant to be the very first since 2007 and the passage of the Petroleum Industry Act (PIA) 2021.

She said the PIA made regulatory provisions open for competitive and transparent processes towards creating value for Nigeria and all stakeholders.

Ndong said the bid round is in furtherance of the commissions’ continuous stakeholder engagement, aimed at actualising such provisions and therefore a golden opportunity for investors.

“This will be followed by successive bid rounds as provided for in the PIA as they are no longer marginal fields since the provisions have been made in the PIA.

“The Nigeria deep water is one of the most prolific hyper carbon bases and has on record, above average theological chance of exploration success. We therefore look forward to working with the industry leaders to build on previous deep water experience and increase our national hydrocarbon reserves and production among other benefits,” she said.