Crude Oil
FG to Launch Bidding Rounds For Seven Oil and Gas licenses
The Federal Government plans to launch bidding rounds for seven deep offshore oil and gas licenses for the first time in fifteen years.
The Federal Government plans to launch bidding rounds for seven deep offshore oil and gas licenses for the first time in fifteen years.
This information was disclosed by the Chief Executive Officer (CEO) of the Nigerian and Upstream Petroleum Regulatory Commission (NUPRC), Mr. Gbenga Komolafe.
According to the CEO, the commission has concluded plans to auction 7 deep offshore oil and gas blocks off the city of Lagos, instead of the Niger Delta coast where most of Nigeria’s oil industry is located.
The CEO said, “All the blocks are in the Lagos waters, not in the Niger Delta, with the added advantage of its proximity to the export-free zone in Lagos.’’
Komolafe stated that the last time the government issued dozens of licenses was in 2007 and it was meant to give access to deep offshore oil and gas production.
While bidding for the blocks would commence in November, he explained that the blocks available for bidding are at depths of about 1,200 meters (3, 9636 feet) and 3,100 meters. While promising that the commission would conduct transparent and fair bidding rounds for the oil blocks.
The federal government’s decision to launch the sales of these assets is happening months after the NUPRC has concluded the allocation of 57 marginal fields in a bid to boost the production of crude oil in the country.
Nigeria’s federal government said the reason the country is suffering from low crude oil production and reduced investment is because of the incessant crude oil theft and illegal pipeline breaches happening in the Niger Delta region.
The deep water offshore production dominated by international oil companies (IOCs) like Shell, TotalEnergies, and ExxonMobil accounts for about 35% of crude oil output in the country. However, this has increased as the operators deal with vandalism, pipeline breaches, and oil theft.
In addition to launching bidding rounds on these oil and gas licenses, the government is advising current license holders to grow their offshore acreage.