Nigeria’s Oil License Auction Attracts Significant Investor Interest, Regulator Announces.
Initially launched in April, the licensing round offered 19 onshore and deepwater oil blocks to investors. Due to heightened interest and additional exploratory activities, the offer has been expanded. “We have undertaken more exploratory activities and as a result acquired more data to expand the offer and extend the deadline. This has given rise to tremendous interest from investors,” said Gbenga Komolafe, head of the NUPRC.
Registration for the auction, initially set to close on June 25, has now been extended by 10 days. Bid submissions will commence on July 8 and conclude on November 29.
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The oil regulator’s goal is to enhance the exploitation of Nigeria’s substantial crude oil and natural gas reserves, estimated at 37.5 billion barrels and 209.26 trillion cubic feet, respectively. To attract more investors, the NUPRC has significantly reduced the entry fees, known as signature bonuses, from approximately $200 million per field to $10 million. The process has also been made more accessible by allowing online submissions via the NUPRC website and offering the option to lease single units of oil blocks or clusters.
Nigeria aims to stem the outflow of investments to African competitors like Angola and Namibia by improving the acquisition process for oil blocks. The country, a member of the Organization of the Petroleum Exporting Countries (OPEC), has seen its oil production drop from around 2 million barrels per day a decade ago to just over 1.4 million barrels per day.
The decline in production has been attributed to oil majors shifting focus from onshore fields, which are prone to sabotage and frequent compensation claims for spills, to more stable deepwater fields.
