The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) yesterday announced that in the next four months, winners of the mini-bid for deep offshore licensing round would be announced to bring the process to an end.
Making the disclosure during a pre-bid conference for the 2022/2023 licensing round for the seven Petroleum Prospecting Licences (PPL), the Chief Executive of the NUPRC, Mr. Gbenga Komolafe, pledged that the process would be highly transparent and competitive.
To ensure that global industry standards were strictly adhered to, Komolafe who spoke in Lagos, during the pre-bid conference, revealed that a renowned firm, Wood Mackenzie has been contracted as the consultant for the mini-bid.
The theme of the conference was: "Growing Upstream Investment in Nigeria through Licensing Round: The Bid Process and Opportunities."
Komolafe explained that the timely approval of the mini-bid exercise by President Muhammadu Buhari, who doubles as the Minister of Petroleum Resources, was a strong commitment to increase the national oil and gas reserves and production for enhanced federation revenue.
He listed the seven deep offshore open blocks as: PPL-300-DO, PPL-301-DO, PPL-302-DO, PPL-303-DO, PPL-304-DO, PPL-305-DO and PPL-306-DO.
The seven deep offshore blocks covering an area of approximately 6,700 square kilometres in water depths ranging from 1,150metres to 3,100metres, he said, are on offer and are also intended to be the first in a series of bid rounds aimed at further development of Nigeria's prospective petroleum basins.
According to him, the bid rounds are within the context of NUPRC's enhanced legal and regulatory frameworks, as enshrined in Section 73 of the PIA, that seek to encourage new investors and investments into the next phase of oil and gas exploration in Nigeria.
"Let me profoundly express that this pre-bid conference is a clarion call to technically and financially capable local and foreign investors to invest and take advantage of the generous fiscal and regulatory regime in the Nigerian upstream petroleum sector.
"The mini-bid round is a market-driven programme expected to outperform the last bid round, which was held in April 2007 during which a total of 45 blocks were put on offer under a different regulatory regime, the Petroleum Act, 1969.
"In line with the provisions of the PIA, the mini-bid round will be managed by the NUPRC with support from its National Data Repository (NDR) and multi-client partners underpinned by high-quality datasets.
"The blocks on offer have extensive 2D and 3D seismic data coverage, including multi-beam and analogue data. Additionally, a 3D MegaSurveyPlus reprocessed Pre-stack Time Migration of remarkable quality is also available to prospective bidders," Komolafe stated.
According to Komolafe, "the exercise is scheduled to last for approximately four months, comprising registration and pre-qualification, data prying/purchase, technical bid submission/presentation, technical bid evaluation and commercial bid conference."
He explained that the NUPRC had announced the commencement and launched the bid round portal, which was officially opened on January 3, 2023.
"Rest assured that the entire bid process pursuant to the provisions of the PIA 2021 and attendant regulations will be fair, transparent, and competitive in line with best practices.
"Furthermore, the mini bid exercise has been designed to attract competent investors from across the world, both local and foreign, that have the capability and competence in operating in deep water environments," he stated.
However, all awardees, he said, must be duly registered in Nigeria under the Companies and Allied Matters Act (CAMA) and may participate either as an individual company, or as a consortium.
He stressed that the commission expects the exercise to be a huge success for Nigeria, describing it as a big step towards growing the nation's oil and gas reserves through aggressive exploration and development efforts as well as boosting production.
In addition, he pointed out that it would expand opportunities for gas utilisation and development, strengthen energy security and economy, provides the opportunity to gainfully engage the pool of competent companies in the oil and gas sector, enables transfer of technology, valorise petroleum assets in the Nigerian territory and attracts investments.
"In addition, the mini-bid round presents us with the opportunity to reinforce Nigeria's commitment to openness and transparency in line with the principles of the Extractive Industry Transparency Initiative (EITI)," the NUPRC stated.
On the global scale, he said that the licensing round would be beneficial to all stakeholders and will in the long run contribute to long-term global energy sufficiency.
"Interestingly, the licensing round process was formulated in cognisance of global sustainability goals. The process will, in addition to technical and commercial considerations, pay the requisite attention to strategies, processes and implementable plans consistent with net zero carbon emission targets, eliminating gas flares as well as overall Environmental, Social and Governance (ESG) considerations.
"The oil and gas industry in Nigeria has embraced the reality of energy transition and is taking strategic position to leverage on the opportunities presented by the unfolding era.
"As a regulatory commission, we have taken deliberate steps in this regard, including the recent issuance of guidelines for the management of fugitive methane and greenhouse gases emissions in the upstream oil and gas operations in Nigeria during the COP27 in Egypt in a manner that attracted wide international commendation for Nigeria.
"However, it is worthy to recognise that recent events around the globe indicate that fossil fuels will continue to be a core part of the global energy mix well into the future, even beyond the 2050 targets for achieving net-zero carbon emissions that have been set by most countries," Komolafe argued.
According to him, the recent increases in the price of energy mostly occasioned by the conflict between Russia and Ukraine and the ensuing energy disruption have reawakened the call for geopolitical energy security and sustainability.
"It will interest you to note that the commission has established a committee to engage and collaborate with world renowned energy consultants, Wood Mackenzie, to ensure that the Nigerian petroleum upstream regulations are in line with international best practices, which will form the basis for regulating the awardees of the seven deep offshore blocks offered in the 2022/2023 mini-bid round exercise," he noted.
Sylva: Assets to raise Nigeria's reserves to 40bn barrels by 2025
On his part, the Minister of State for Petroleum Resources, Chief Timipre Sylva, stated that the new deep offshore blocks would increase the country's crude oil reserves from an initial 37 billion barrels to 40 billion barrels by 2025, while also having the potential to increase the country's gas reserve from 208 trillion cubic feet (tcf) to 600tcf.
Sylva, who was represented by the Permanent Secretary at the Ministry of Petroleum Resources, Mr. Gabriel Aduda, noted that one of the key mandates of the ministry was to grow the crude oil reserves from the current 37 billion barrels of oil to 40 billion barrels of oil by 2025.
He said, "The PIA 2021 provided the requisite support and framework for achieving this mandate by providing fiscal terms, which the industry players can operate with, utilise and deploy world-class cutting edge technologies to de-risk exploration in the deep offshore.
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"Hydrocarbon encountered in these seven offshore blocks will significantly contribute in lifting our oil reserves and ensuring our continuous energy sufficiency.
"The seven deep offshore blocks have been thoroughly evaluated and are believed to have significant potential for increasing our hydrocarbon reserves. They are in some of the most promising areas of the deep waters of Nigeria, which have been de-risked by other producing fields nearby.
"As we all know, the oil and gas industry has been a vital sector for the Nigerian economy for many years. We must also recognise that the world is facing a critical challenge in the form of climate change."
Delivering her welcome address, NUPRC Executive Commissioner, Rose Ndong noted that the bid round was in furtherance of the commission's continuous stakeholder engagement, the first since 2007, and also the first since the signing of the PIA 2021.
"The PIA made regulatory provisions for an open, competitive and transparent bid process towards creating value for Nigeria and all stakeholders. Hence the bid round is aimed at actualising such provisions, therefore it is a golden opportunity for investors.
"This will be followed by successive bid rounds as provided for in the PIA as they are no longer marginal fields since the provision has been made in the PIA."
"Nigeria's deep water is one of the most prolific hydrocarbon bases and has on record, above average theological chance of exploration success.
"We, therefore, look forward to working with the industry leaders to build on the previous deep water experience and increase our national hydrocarbon reserves and productions among other benefits." She added.
