The Federal Government on Tuesday announced an update to the guidelines for the bids in the 2022/2023 and 2024 Oil Licensing Rounds.
The upstream industry regulator, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), handlers of the bid process, said in a statement in Abuja, that contrary to the guidelines previously announced for the exercise, the same criteria would now be applicable for all categories of bidders participating in both licensing rounds.
Under the bid guidelines, some pre-qualification criteria were published under technical competence and financial capability of prospective investors to guide bidders participating in the process either as single indigenous/foreign applicants, or consortia of companies.
Under the requirements for technical competence, applicants were, among other criteria, expected to possess the requisite technical experience in deep offshore exploration and production operations, including evidence of operatorship in deep offshore for a minimum of five years.
Similarly, under financial capability, applicants were required to satisfy at least one of the following requirements, namely an average annual turnover of $200m; cash at hand of $200m, or Letter of credit from a reputable financial institution valued at $200m.
Also, the applicants were expected to have a market capitalization of not less than $2b; bank guarantee of $200m, or Parent Company Guarantee of $200m (for newly incorporated companies).
However, in a bid to encourage more participants in the process to exploit the nation’s hydrocarbon resources and grow its output, the government decided to remove the requirements that acted as barriers to attracting fresh investments to the industry.
In May, the Commission Chief Executive, Gbenga Komolafe, who announced the commencement of the bid process for the 2024 Nigeria Oil Licensing Round, disclosed that some of the oil blocks on offer under the 2022/23 Mini Bid Round included some deep offshore acreages, while others cutting across onshore, continental shelf and deep offshore terrains were included under the 2024 Licencing Round.
However, to remove all entry barriers to prospective bidders and open the process for all interested investors, he said the NUPRC sought and obtained the approval of the President, as Petroleum Minister, to cap the signature bonus payable for award of the acreage, to make the fiscal regimes attractive to all prospective bidders and minimise entry fees for both licencing rounds.
Komolafe said the decision was in line with the Minister’s determination to create the enabling and attractive investment regimes in the upstream oil and gas sector to grow the industry.
Consequently, the CCE explained that apart from a uniform signature bonus, it became necessary to establish the same bid criteria to be applicable for both licencing rounds, to promote transparency and provide a level playing ground for all bidders.
“Since the criteria for the award of the oil blocks are now much more attractive than they initially were during the 2022/23 Mini Bid Round, it is in the interest of equity and fair play to give all investors the same opportunity to bid for the assets,” the CCE clarified.
As a result, he said all oil blocks on offer in both the 2022/23 and 2024 Licencing Rounds would be available to all interested investors based on the same criteria.
To provide the opportunity for bidders who had already submitted their applications to accommodate the adjustments, the CCE said the Commission decided to reopen the 2022/23 Mini-Bid Round registration phase to allow more investors to take advantage of the attractive entry terms and conditions to participate in the exercise.
However, he clarified that all pre-qualified applicants published on the 2022/23 Mini Bid Round portal would not be required to go through a new pre-qualification process, as their technical submissions would be acceptable as still valid and eligible even for the 2024 Licencing Round.
He said such applicants may opt to revise their Bid Bonds and resubmit fresh Commercial Bids to take advantage of the more attractive criteria applicable to both licensing rounds based on the new bid criteria.
Again, he said the applicants were at liberty to bid for oil blocks on offer in the 2024 Licencing Round.
To allow interested investors to take advantage of the expanded opportunities, the Commission announced an adjustment to the 2024 Licencing Round Schedule previously released to the public.
Under the new schedule, Registration/Submission of Pre-Qualification Documents initially scheduled to close on June 25, 2024 was extended by ten days till July 5, 2024, while Data Access/Data Purchase/Evaluation/Bid Preparation and Submission initially scheduled to open on July 4, 2024 till November 29, 2024, would now be shifted by four days, to start on July 8, 2024 till the closing date as previously scheduled.
The Commission said all other dates in the published 2024 Licencing Round Schedule would remain the same, unless otherwise communicated.
The CCE reiterated the Commission’s commitment to continue to work with its partners to ensure the country derived the full value from the its abundant oil and gas reserves and increase production.
Besides, the Commission announced that as a result of newly acquired data from the exploratory activities undertaken by its Multi-client companies in respect of deep offshore oil blocks, the number of oil blocks in the basket of acreages on offer in the 2024 Licencing Round would be increased by 17 deep offshore blocks, while some others, namely Petroleum Prospecting Licenses (PPLs) 3008, 3009, 267, 268 as well as Petroleum Mining License (PML) 51 have been removed from the Bid process due to ongoing litigations.
Also, in accordance with the already published guidelines, the Commission informed prospective bidders that some of the acreages on offer, namely PPL 300-CS & PPL 301-CS, PPL 2000 and PPL 2001, would attract only applications submitted as a single unit.
In accordance with the published guidelines for the bid, the Commission restated its earlier directive that applications some oil blocks on offer, namely PPL 300-CS & PPL 301-CS, PPL 2000 and PPL 2001 should be submitted either as clusters or as single units.
