The Nigerian Upstream Petroleum Regulatory Commission (NUPRC), on Wednesday announced that the process to invite Nigerian and foreign oil industry players to apply for seven more facilities had begun.
Gbenga Komolafe , S Chief Executive Officer of the commission while peaking during a press briefing to formally kick off the process, stated that in this year’s mini bid round, the offshore blocks will be putting on offer assets covering an area of approximately 6,700 km2 in water depths of 1,150m to 3,100m.
The success of the mini bid round, he said, will ensure all stakeholders gain value from the country’s resources, while paying close attention to reduction in carbon emissions, as well as overall Environmental, Social And Governance (ESG) considerations.
The offshore assets that were formally relinquished by previous owners are located in Benin Basin off shore Lagos, rather than off the coast of the Niger Delta further to the east where most of the country’s oil industry is concentrated.
The decision to put up the assets for sale is coming months after the NUPRC concluded the disposal of 57 marginal fields after a long and winding process to ramp up the country’s struggling oil production efforts.
Earlier, the NUPRC also resumed a separate bidding round for firms interested in commercialising gas that is burned off – or “flared” – by oil producers.
Nigeria’s oil output fell to a multi-decade low of just over 900,000 barrels per day in September and had almost halved since the first quarter of 2020, until the recent resurgence of production after what looked like a declaration of a national emergency on oil losses in the sector.
The government has blamed rampant crude theft on the pipelines that crisscross the Niger Delta for shutting down wells and killing off investment. In recent years, deepwater production led by international companies such as Shell Plc and TotalEnergies has accounted for about 35 per cent of oil output but its share has risen this year as onshore operators have struggled.
Komolafe added that a dedicated programme portal (br.nuprc.gov.ng) for the mini bid round had been published by NUPRC, providing details of the bid round process, including the registration and prequalification requirements, and detailed guidelines for applicants.
A pre-bid conference, he disclosed, is scheduled for 16th Jan 2023, to provide potential applicants with an opportunity to ask questions they may have concerning the mini bid round process and requirements, after which interested companies will be invited to submit their pre-qualification applications by January, 31, 2023.
“NUPRC will continue to provide further details and roadmap for this international competitive mini bid round in due course.
“It is a great privilege to announce the mini bid round 2022 and we look forward to the success of the upcoming events and activities,” he stressed.
According to Komolafe, the bid round is an opportunity to spur new exploration and drilling activities in the prospective deep waters offshore Nigeria.
The bid round, he stressed, is the first in a series , aimed at further development of the prospective petroleum basin which will be held in accordance with the Petroleum Industry Act 2021 (PIA), with its enhanced legal and regulatory frameworks that seek to encourage new investors and investments into the next phase of exploration in this region.
The NUPRC chief executive noted that the process will be managed by the NUPRC, in line with the provisions of the PIA, as the statutory body responsible for ensuring compliance with petroleum laws, regulations, and guidelines in the Nigerian upstream petroleum industry.
“The National Data Repository (NDR) of NUPRC and our multi-client partners are delighted and ready to support the mini bid round underpinned by high-quality datasets. The blocks have extensive 2D and 3D seismic data coverage, including multi-beam and analogue data.
“Additionally, a remarkable quality, 3D MegaSurveyPlus reprocessed Pre-stack Time Migration (completed October 2022), with angle stacks and gathers is also available to prospective bidders. Links to all data can be accessed via the dedicated NUPRC portal.
“The mini bid round is a market-driven programme and will follow a transparent and competitive procurement process designed to attract competent third-party investors from across the world that have the capability and proficiency in operating in deep-water environment,” Komolafe explained.
Historically, he said the mini bid round intends to build on the successes of the last bid round that held in April 2007 during which a total of 45 blocks, drawn from the inland Basins of Anambra, Benue and Chad; the Niger Delta Continental Shelf; Onshore Niger Delta and Deep Offshore were put on offer.
The 2007 bid round , he recalled , was held under a different regulatory regime (the Petroleum Act, 1969) and generated massive interest and participation with its attended revenue which made the exercise a success.
Komolafe stated that that the bid round was open to foreign and local bidders with the technical wherewithal, explaining that the projected revenue can only be revealed after the initial ‘prospectivity’ analysis on the basis of data made available.
“its a bit premature to have an accurate revenue projection, until this is done,” he said, but added that the NUPRC may have its own reserve bid, which may not be made available until the process begins.
The year has witnessed very challenging situations, he noted, reiterating that the menace of crude oil theft affected production which further affected revenue.
As a commission, he stated that the NUPRC has worked assiduously and had remained focused on its mandate which has resulted in increased production, which today stands at 1.4 million barrels per day.
“We have taken other initiatives and within a space of one year, we have been able to implement the critical aspects of the PIA and on the Host Communities’ side , we have been able to incorporate 63 trusts which is a landmark.
“Why this is important is that in the spirit of the PIA, effectively implementing the act and the trust will enhance production because investors will be able to ramp up production.
“We are ensuring that the challenges of metering error which is another area of hydrocarbons accounting challenge is tackled while the gap is filled within the shortest possible time,” Komolafe assured.
