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Nigeria brandishes Wood Mackenzie to woo oil investors

Oil majors’ Q2 earnings reflect oil market recovery

Amid waning investor appetite, the Nigerian oil sector regulator says it will collaborate with Wood Mackenzie, an international energy consultancy, to ensure its latest oil bid round complies with international best practices.

Gbenga Komolafe, chief executive of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), at a pre-bid conference event in Lagos, on Monday, said this move will ensure that the 2022 mini-bid round is conducted in line with international best practices.

But it is not clear whether this would be enough to encourage interest in the country’s oil sector where huge projects have been stalled due to lack of final investment decisions by oil majors.

“It is highly remarkable that the approval of the exercise by Mr President is the first in the last 15 years,” Komolafe said. In accordance with the Petroleum Industry Act (PIA) 2021, the commission has issued a licensing round guideline and published a licensing plan for the total of seven deep offshore oil blocks.

“The seven deep offshore blocks cover an area of approximately 6,700 km2 in water depths of 1,150m to 3,100m,” he said.

Komolafe said the blocks on offer have extensive 2D and 3D seismic data coverage including multi beam and analogue data. The exercise is scheduled to approximately last for four months.

He said: “Be rest assured that the mini-bid round will be fair, transparent, and competitive in line with best practices. The exercise will attract competent investors both internationally and locally.

“The mini-bid is expected to be a huge success for Nigeria and is a big step towards growing the nation’s oil and gas reserves through aggressive exploration, and development efforts, boosting production and expanding opportunities for gas utilisation and development.”

Komolafe said it will also strengthen energy security and the economy, providing the opportunity to gainfully engage in proof of competent commerce in the oil and gas sector.

“It will create employment opportunities, and enable transfer of technology. In addition, the mini-bid round presents us with the opportunity to reinforce Nigeria’s commitment to openness and transparency in line with principles of the extractive industry transparency initiative,” he said.

Timipre Sylva, minister of state for petroleum resources, who was represented by Gabriel Abuda, permanent secretary at the ministry of petroleum resources, said one of the key mandates of the ministry is to increase petroleum reserves from its current 37 billion barrels to 40 billion barrels by 2050.

Read also: Nigeria will produce 2.2m bpd of oil in 2023 – Kyari

Nigeria is committed to develop its upstream petroleum resources, especially gas of over 200 trillion standard cubic feet. With development and focused exploration, these reserves can go up to 600 trillion standard cubic feet.

He said 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 country is looking for ways to achieve self-sufficiency and this will affect the way the country’s natural resources will be exploited,” Sylva said.

“Nigerians can be assured of prompt decisions that will aid the expedient exploitation of resources for the benefit of the general population.”

In her welcome remarks, Rose Ndong, executive commissioner, exploration and acreage management at NUPRC, said the bid round is based on the actualisation of value creation, transparency for Nigeria and all stakeholders.

She described it as a golden opportunity for investors in the oil and gas sector.

“The Nigeria deep water is one of the most prolific hydrocarbon basins and has on record above average geological exploration success,” 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.”