… restates commitment to 40bn bpd crude oil, 600tcf gas reserves
The Nigerian Government has assured international and local investors on transparency and a technology-driven bidding process during the ongoing 2022 mini-bid for deep offshore licensing round exercise.
It’s also seeking to ramp up the country’s hydrocarbon reserves from an initial 37 billion barrels to 40 billion barrels of crude oil and natural gas reserve from the current 208 trillion cubic feet (tcf) to 600tcf.
This was established by the government on Monday, during a pre-bid conference for the 2022/2023 licensing round for the seven deep offshore Petroleum Prospecting Licences (PPL) with the theme “Growing Upstream Investment through Licensing Rounds: The Bid Process and Opportunities”. in Lagos.
Demonstrating the country’s commitment to switching from the old narratives of misgovernance, fiscal recklessness, and lack of transparency in contracting and licensing processes in the extractive industry, the Nigerian Government revealed that it is collaborating with Wood Mackenzie, an international energy consultancy firm, to boost investors’ confidence throughout the entire process.
EnergyDay’s check showed that this is the first time in 15 years that the government would be offering to attract investors in its offshore blocks, since 1993 when it awarded its commercial deepwater discovery, Bonga oil field (Oil Mining Lease, OML, 118) to Shell Nigeria Exploration and Production Company (SNEPCO).
Thereafter, in 2007, other deepwater licensees including Agbami, Erha, Akpo, Egina, Usan were awarded to multinational oil companies.
The seven deep offshore open blocks are (PPL-300-DO, PPL-301-DO, PPL-302-DO, PPL-303-DO, PPL-304-DO, PPL-305-DO & PPL-306-DO). The seven Deep Offshore blocks, covering an area of approximately 6,700 km2 in water depths of 1,150m to 3,100m, are on offer in this Mini Bid Round.
Engr. Gbenga Komolafe, Chief Executive, Nigerian Upstream Petroleum Regulatory Commission (NUPRC), during his remark at the conference in Lagos affirmed the commitment to international best practices in strict compliance with the spirit and letter of the Petroleum Industry Act, 2021.
According to him, this is the first major bid round that is being conducted post-PIA,2021 and within its existing framework enshrined in Section 73 of the act which encourages new investors and investments into the next phase of oil and gas exploration in Nigeria.
Komolafe said, “The idea of mini-bid was conceived based on the fact that the blocks are relatively few in number. In comparison with the previous exercise, this exercise is being conducted strictly in line with the provisions of the PIA, 2021. This is evident by the large attendance of prospective investors that showed interest this time round.
“PIA is an enabling law of the federation, there won’t be any form of post-election political interference, especially on questions relating to the fate of the blocks. The PIA is very clear about the requirements and that is why from the kick-off of the mini-bid process in December 2022, we have been very transparent. We have not left anybody in doubt, and we are committed to applying the prescriptions of the law.
“We are assuring prospective bidders both local and foreign that this exercise is going to be fair, competitive, and transparent. It will strictly follow the position of the law.
“To that extent, the exercise is ring-fenced against any forms of influence. This is one major difference between the exercises that were conducted pre-PIA and the ongoing exercise, post-PIA.
“This is a green field block, the data analysts have shown that there is sufficient information available for bidders. We want to ensure that bidders are not bidding blindly.
“The Commission has committed so much to the process in terms of research and adequate funding before announcing this bid-round on offer once they make the necessary payment.
Speaking about the benefit of the exercise to the Nigerian economy, Engr. Komolafe said the process at completion would help to grow Nigeria’s oil and gas reserves and revenue through aggressive exploration, and development efforts, boosting production and expanding opportunities for gas utilisation and development.”
“This bid round would have huge and multiple benefits to the people and the revenue of the federation, including ensuring energy security and economic growth, while also providing the opportunity for gainful employment transfer of technology for millions of Nigerians.
Giving assurance of the high-quality datasets of the block available for bidders, Engr. Komolafe said, there is ample evidence supported by the PGS and TGS research that the blocks that are being put up for sale are very prolific assets given the fact of their locations and other discoveries of oil and gas within the axis.
He said, “Geologically and based on the available data set, these blocks are prolific in oil and gas reserves.
“We have done the extensive 2D and 3D seismic data coverage, as well as the multi-beam and analogue data of all the blocks. We equally have the 3D MegaSurveyPlus reprocessed Pre-stack time migration of remarkable quality for qualified bidders.
The CEE further revealed that the exercise was structured to attract competent local and foreign, with requisite technical and commercial capabilities, especially in the deep offshore terrain.
According to him, interested investors must be duly registered in Nigeria under the Companies and Allied Matters Act (CAMA) and may participate either as an individual company or as a consortium.
Engr. Komolafe however assured investors of the commitment of the Commission to transparent and unbiased bidding exercise.
He said, “The Commission has established a committee to engage and collaborate with Wood Mackenzie, a global research and consultancy group supplying data consultancy firm, to ensure that we conduct ourselves in line with international best practices, which will form the basis for regulating the awardees of the seven deep offshore blocks offered in the 2022/2023 mini-bid round exercise.
Explaining why the 2022 mini bid round would be different from other exercises conducted in the past, Komolafe said, “A bidder could bid as an entity or a consortium, like what happened during the last marginal field bid round, as a regulator we don’t intend to do any false marriage. We will be guided strictly by the provisions of the PIA.
Chief Timipre Sylva, Minister of State for Petroleum Resources, who was represented by Mr. Gabriel Aduda, Permanent Secretary at the Ministry of Petroleum Resources, revealed that the exercise has the capacity to increase Nigeria’s crude oil reserves from an initial 37 billion barrels to 40 billion barrels by 2025, with gas reserve increasing from 208 trillion cubic feet (tcf) to 600tcf.
Sylva, “The PIA provided regulatory support for the mandate of providing terms that industry players and operators can utilise and deploy world-class cutting-edge technologies to de-risk exploration offshore and hydrocarbons discovered in the listed offshore blocks will significantly contribute to Nigeria’s energy sufficiency.
“The crude oil and gas that woukd be drilled from the seven deep offshore blocks will significantly contribute to lifting our oil reserves and ensuring our continuous energy sufficiency.“The blocks have been thoroughly evaluated and are believed to have significant potential for increasing our hydrocarbon reserves. They are located within some of the most promising areas of the deep waters of Nigeria, which have been de-risked by other producing fields nearby.The Minister however noted that the country is concerned about achieving self-sufficiency and this bid round would impact the way we exploit our natural resources.
Rose Ndong, NUPRC, Executive Commissioner, Exploration and Acreage Management, earlier in her remark said that the bid round is based on the actualisation of value creation, and transparency for Nigeria and all stakeholders.
According to her, this is a golden opportunity for investors in the oil and gas sector. She added that Nigeria’s blocks are one of the most prolific hydrocarbon basins and have on record above-average geological exploration success,” she said.
She said, “We look forward to working with the winning bidders to build on previous deepwater experience to increase our national hydrocarbon results and production, among other benefits.”