To transparently unveil the preferred bidders and discuss the strategies to harness Nigeria’s vast hydrocarbon resources under the 2024 oil licensing round, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) on Wednesday held the Commercial Bid Conference in Lagos.
The event, which was attended by the bidders, key oil and gas industry leaders and media representatives, underscored the importance of the bid round as the first since the implementation of the Petroleum Industry Act (PIA) in August 2021.
Addressing participants, the Commission Chief Executive, Engr. Gbenga Komolafe, said the Licensing Round was not merely a commercial exercise, but also a bold declaration that Nigeria was ready for business with the world.
Komolafe said the unveiling of the 2024 Licensing Round was a pivotal moment in Nigeria’s energy landscape to set the stage for significant advancements in the country’s hydrocarbon development.
The unveiling of the 2024 Licensing Round last May, with the offer of 24 carefully selected oil blocks spanning onshore, shallow waters, and deep offshore terrains, he pointed out, represented a significant leap in Nigeria’s hydrocarbon development strategy.
Complementing the offer, he added, were the seven deep offshore oil blocks from the 2022 Mini Bid Round, bringing the total acreages on offer to 31.
Cumulatively, he said these assets hold enormous potential for the country’s economic growth, energy security and technological advancement.
With over 209 trillion cubic feet of natural gas reserves and over 37 billion barrels of oil reserves, the CCE said Nigeria was poised to capitalise on its untapped potential.
He reminded participants of the key objectives of the licensing round to include the drive to grow the country’s oil and gas reserves through aggressive exploration and development; boost the country’s oil production, while expanding opportunities for gas utilisation across the value chain.
Also, he said the national objective of the bid round include enhancing the country’s energy security and economic growth; attracting investments, while creating employment opportunities and enabling technology transfer.
Other objectives include optimising the value of the country’s petroleum assets and ensuring sustainable development of untapped potentials.
Komolafe emphasised the country’s commitment to transparency and accountability in managing its oil and gas sector, by aligning with global best practices and principles of the Extractive Industry Transparency Initiative (EITI).
In line with bid guidelines, the commercial bids would be opened through an electronic bidding process supervised by representatives from the Nigerian Extractive Industries Transparency Initiative (NEITI), the Federal Ministries of Finance, and Petroleum Resources.
On the highlights of some unique features of the Licensing Round designed to foster an investor-friendly environment, Komolafe said they include Investor-friendly terms, with reduced signature bonuses, adding that the recent Presidential Executive Orders on non-associated gas (NAG) development promoted the optimisation of local content opportunities and the reduction of contracting costs and timelines.
These features, he pointed out, have fostered an enabling environment that strengthens Nigeria’s competitiveness in the global energy market.
Besides, he said they have streamlined the allocation process by prioritising single applicants or well-established consortia, to ensure greater efficiency and accountability, as against the 2020 Mini bid round where the allocation of oil blocks to multiple companies created credibilityj challenges.
On collaborationn for Local Content Development, the CCE said the bid round was also designed to foster collaboration between reputable local companies and their international counterparts, promoting local content development, creating employment opportunities and facilitating technology transfer.
On sustainability of commitments by the operators, Komolafe said environmental and social considerations remain a top priority, adding that the country would ensure all exploration and production activities adhered to global best practices, while promoting harmonious and peaceful coexistence between oil and gas companies and their host communities.
With the commercial bid conference, successful bidders would receive their oil blocks within months, while payment of Signature Bonuses would be made in full before the granting of licenses or leases.
Awarded oil blocks would thereafter undergo aggressive exploration and development in line with minimum work programme obligations, with priority on capacity building and job creation for Nigerians, while optimal value is delivered to both local and foreign investors, while government would continue to integrate sustainability measures into all exploration and production activities, to safeguard host communities and protecting the environment.
The CCE noted that as Nigeria embraces the transformative opportunity for growth, driven by favourable fiscal provisions under the PIA and Presidential Executive Orders, the Commission is optimistic about early final investment decisions (FIDs) by the investors, increased exploration activities, and prompt first oil and gas production across all terrains.
Highlighting the transparency, fairness and competitiveness showcased in the bid round in line with the provisions of the PIA, Komolafe expressed optimism that the implementation of the bid woulds enjoy the incentives in the Presidential Orders and initiatives recently released.
He urged stakeholders to take advantage of the opportunities offered by the bid round to responsibly develop an inclusive Nigeria oil and gas industry.
