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Concerns as 211 Nigerian Oil Blocks Remain Idle

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  • Concerns as 211 Nigerian Oil Blocks Remain Idle

More than 50 percent of Nigeria’s oil and gas blocks remain untapped even as crude oil production continues to hover around two million barrels per day while gas shortages persist in the country over the years, ’FEMI ASU reports.

Out of 390 oil blocks in the country, 211 are yet to be allocated by the Federal Government, latest data obtained from the Department of Petroleum Resources have shown.

With many other countries extending efforts to ramp up their oil and gas production and reserves, industry experts have voiced concerns about the lack of oil licensing rounds in Nigerian since 2008.

According to the DPR, 179 blocks have been allocated as of December 2017, comprising 111 Oil Mining Leases and 68 Oil Prospecting Licences.

The country has seven basins, namely Anambra, Benin, Benue, Bida, Chad, Niger Delta and Sokoto.

In Anambra, 12 out of 19 blocks have not been allocated; in Benin, 39 out of 50 are open; in Benue, 41 out of 43 are still idle, while none of the 17 blocks in Bida has been allocated.

In Chad basin, 40 out of 46 blocks are open; in the oil-rich Niger Delta, 34 out of 187 blocks are still idle, while Sokoto’s 28 blocks remain unallocated.

A former President of the International Association for Energy Economics, Prof Wumi Iledare, in a telephone interview with our correspondent, noted that exploration was critical in order to increase the nation’s oil and gas reserves.

“You cannot explore if the right to prospect is not granted, and you cannot grant unless there is a bidding process. And you cannot bid if the environment is not conducive,” he said.

He added that more blocks were being awarded in other countries “even though we are more endowed than those places.”

Iledare, who is the director of Emerald Energy Institute, University of Port Harcourt, said, “In the Gulf of Mexico in the United States, they do bidding round twice a year. But the last time we did any licensing round in Nigeria was 2007.”

According to him, many of the oil blocks currently producing in Nigeria are those awarded in 1993.

“The days of discretionary awards should be over because discretionary award is a process of converting common wealth to personal wealth, and the society really doesn’t benefit from this,” he added.

A petroleum expert, Mr Bala Zakka, told our correspondent that those unallocated blocks should be awarded to serious-minded investors, “instead of allocating blocks to individuals who eventually will not have the financial muscle.”

He said, “At the end, they (the individuals) farm it out or try to look for partners, which they cannot get. For individuals to be given blocks, they must prove beyond a reasonable doubt that they have technical and financial competence.

“When you have a consortium of some financial institutions, technocrats and businessmen coming together and bidding for a block, they are likely going to sustain that block and do everything to keep it moving.”

Zakka added, “I would rather support us giving few blocks to investors who have the financial, professional and technical capabilities than giving so many blocks to people who will just keep them lying fallow.”

He said many OPLs had not been able to get to the point of being converted to OMLs because of the high level of capital required.

An OPL gives its holder the exclusive right to explore for and develop oil and gas within a defined area while an OML gives its holder the exclusive right to explore for, develop and produce oil and gas within a defined area.

To apply for an OML, an OPL licence holder will have found oil in commercial quantities and satisfied all the conditions attached to the OPL.

He said, “If you end up not finding oil in commercial quantities after prospecting, all the losses will be incurred by you. That is why we keep advising that people should not just go into the oil and gas business without having some simple education.

“By the time they now understand what it takes, they are stuck in the middle of the road; they can’t return the blocks to the government to collect their money back and they did not find people to partner with, and so they will leave the blocks fallow. That is exactly what is happening.”

An energy analyst and Partner at Bloomfield Law Practice, Mr Ayodele Oni, also lamented that the country had not done a bid round in over 10 years, saying, “I think it is important even if it is to generate more revenue for the government.”

In January this year, the Chief Executive Officer of Total, Mr Patrick Pouyanne, called on Nigeria to issue new exploration licences, saying the country’s oil and gas sector has been dormant in recent years in terms of exploration and new projects due to uncertainties and the ongoing discussions over oil industry regulation.

“I hope the new government that will come after the elections will launch new tenders for awarding new exploration licences,” Pouyanne was quoted by Reuters as saying on the sidelines of a meeting of Nigerian and French businesses in Paris.

Last week, the Minister of State for Petroleum Resources, Dr Ibe Kachikwu, decried the state of the nation’s oil industry, which he described as under-developed.

Kachikwu lamented that crude oil production in the country had been hovering around 1.9 million barrels per day and two million bpd over the past few years.

He spoke at the Nigeria Oil and Gas Opportunity Fair in Yenagoa, Bayelsa State where stakeholders examined how to maximise investments in the oil and gas industry for the benefit of the Nigerian people.

“Why is it that we continue to be under-developed in the oil and gas sector? Our production continues to hover around 1.9 million bpd and two million bpd. Why have we not been able to lead investors and producer that are operating across Africa? Why are we not taking over from the multinationals, which have been here for over 50 years?” the minister asked.

Kachikwu noted that the country had not made the most of its oil and gas resources over the years.

He said, “We should be producing over four million bpd of crude oil. We should be producing enough gas for power generation. We should have rapidly developing infrastructure. Something is fundamentally wrong in what we are doing. There is a need for us to move. Oil is going to become a fast-degenerating asset. The shale phenomenon and alternative energy are taking over the world.”

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Economy

India, Spain, the Netherlands, USA, Nigeria’s Major Export Markets -NBS

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India, Spain and the Netherland top Nigeria’s export markets in the final quarter of 2020, according to the latest data from the National Bureau of Statistics (NBS).

The Commodity Price Indices and Terms of Trade Q4 2020 report showed that the United States and China trailed the three.

However, the NBS revealed Nigeria exports mainly crude oil and natural gas during the period under review.

It, “The major export and import market of Nigeria in Q4 2020 were India, Spain, the Netherlands, United States and China.

“The major export to these countries were crude petroleum and natural gas. The major imports from the countries were motor spirits, used vehicles, motorcycles and antibiotics.”

The bureau stated that the all-commodity group import index increased by 0.13 per cent between October and December 2020.

This was driven mainly by an increase in the prices of base metals and articles of base metals (one per cent), boilers, machinery and appliances; parts thereof (1.03 per cent), and products of the chemical and allied industries (0.75 per cent),” it stated.

The NBS, however, noted that the index was negatively affected by animal and vegetable fats and oils and other cleavage products.

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Economy

Onyeama: Qatar To Invest $5bn In Nigeria’s Economy

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The oil-rich state of Qatar is to invest a total of $5 billion in Nigeria’s economy, the Foreign Affairs Minister, Godfrey Onyeama, has disclosed.

Onyeama, who spoke Sunday at a send forth dinner in honour of Nigeria’s Ambassador-designate to the State of Qatar, who is also the outgoing Director of Protocol (DOP) at the State House, Ambassador Yakubu Ahmed, also stated that recent career ambassadorial appointments made by the gederal government was based on merit, experience and professionalism.

The minister further said there had been discussions with Qatar on partnership with Nigeria’s Sovereign Wealth Fund (SWF), for significant investments in the region of $5 billion in the Nigerian economy.

According to him, ‘‘Qatar is a weighty and strategic country and very strategic in that part of the world and we are putting our best feet forward to advance the interest of our country economically and in other areas.”

He recalled that President Muhammadu Buhari had visited the State of Qatar in 2016 and the Emir of Qatar, Tamim Bin Hammad Al-Thani, reciprocated with a State visit in 2019.

Onyeama also explained that only trusted hands with a track record of diligence, experience and professionalism in the Foreign Service were recently appointed career ambassadors by the federal government.

The minister said the appointment of Ahmed and other career ambassadors were predicated on posting dedicated and keen Foreign Service practitioners to serve as image makers of the country.

He said: ‘‘Ambassador Yakubu Ahmed is a dedicated professional with a penchant for rigour and detail. He is very capable and one of the best in the Ministry of Foreign Affairs. He is personable, affable, extremely friendly, dispassionate and objective.

‘‘He is going to head a very important mission, a very important country, reckoned to be one of the richest countries in the world, per capita, and there’s a lot we will be doing with the State of Qatar.”

Also speaking, the Deputy Chief of Staff, Adeola Rahman Ipaye, described the honoree as a ‘‘perfect gentleman, very even-natured and always well turned out’’.

Ipaye said he had no doubt that the newly appointed ambassador would serve the country well in Qatar, adding that: ‘‘We are further encouraged that when he completes this assignment, he would return to serve Nigeria in a higher capacity.’’

In his remarks, the Permanent Secretary, State House, Tijjani Umar, while congratulating the outgoing DOP on his appointment, lauded Ahmed for excellent service to the State House and the nation.

‘‘He served this institution and the nation with the deepest sense of responsibility and it is very important that we establish a tradition where the system appreciates those who have served it well and those who will continue to serve it well,’’ he said.

Umar urged the new envoy to keep very fond memories of his time at the Presidential Villa, assuring him of the prayers and goodwill of all the staff.

Responding, Ahmed thanked President Buhari for the great honour and privilege of making him his principal representative in Doha, Qatar.

The Ambassador-designate pledged to deplore his energy and skill to the promotion of the existing cordial relationship between Nigeria and Qatar, particularly in the areas of economic, political, cultural and consular affairs as well as other key areas.

Ahmed, who joined Nigeria’s Foreign Service in 1993, said during his years in public service he had learnt that ‘‘patriotism, selfless service, diligence, determination and perseverance will always result in the achievement of the desired objective’’.

According to him, these virtues would be his ‘‘watchword’’ in the pursuit of Nigeria’s foreign policy objectives and the attainment of national interests.

The Ambassador-designate singled out for appreciation the Chief of Staff to the President, Prof. Ibrahim Gambari, and the state Chief of Protocol, Ambassador Lawal Kazaure, saying he had learnt a lot working under their mentorship.

He expressed gratitude to the Minister of Foreign Affairs and the Permanent Secretary, State House for giving him the opportunity of a memorable work experience in the State House.

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Economy

France, Nigeria to Build New Partnership

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France is currently aiming at building a new partnership with Nigeria, with the dispatching of its Minister in charge of Foreign Trade and Attractiveness, Franck Riester, to Nigeria.

Riester, who was expected at the time of filing this report on Monday, is scheduled to visit Nigeria from 12-14 April, 2021.

A statement from the French Embassy in Nigeria said: “Franck Riester is visiting Nigeria from 12 to 14 April, a visit that follows up on the priorities set by French President Emmanuel Macron during his official visit to Nigeria in July 2018 and his desire to build a new partnership between Africa and France.

“As the largest economy in Africa and the economic engine of West Africa, Nigeria is indeed a major partner for France, the first in sub-Saharan Africa with bilateral trade amounting to a total of 4.5 billion USD in 2019 (2.3 billion USD in 2020, due to the Covid-19 pandemic).”

It disclosed that the minister will have several official meetings in Abuja and Lagos, in order to underline the importance of the bilateral economic relationship and to prepare the summit on the financing of African economies in Paris on 18 May.

It revealed that the objective of the mission is also to further strengthen the links between the French and Nigerian private sectors, and “in this regard, the minister will have in-depth discussions with the main Nigerian economic actors to strengthen bilateral cooperation and investments, both in Nigeria and in France, particularly in the logistics sector”.

It said while in the country, the minister would meet with young Nigerian entrepreneurs in the cultural and creative industries sector, to discuss the major role of their country in African creativity and the development of the African entrepreneurial ecosystem, with the support of France.

It further said: “The minister will also open the ‘Choose Africa’ conference, a €3.5 billion initiative by President Emmanuel Macron dedicated to supporting the development of start-ups and SMEs in Africa to enable the continent to benefit fully from the opportunities of the digital revolution.”

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