“$200m for Winners”: FG Gives Update on 2024 Oil Blocks Licensing Round

• The Nigerian Upstream Petroleum Regulatory Commission has removed five oil blocks from the current round of licensing
• According to recently obtained information from the Multiclients, there will be more Assets available in the current licencing round
• Subsequently, the NUPRC disclosed that deepwater investments will now be eligible for a $10 million signing bonus

Legit.ng journalist Zainab Iwayemi has over 3-year-experience covering the Economy, Technology, and Capital Market.

The Nigerian Upstream Petroleum Regulatory Commission has eliminated five oil blocks from the current licensing round because of legal challenges.

There are reportedly five oil blocks involved in different legal disputes amid the commencement of the 2024 licensing phase registration.

The Nigerian Upstream Petroleum Regulatory Commission confirmed that the assets affected are PPL3008, PPL3009, PML51, PPL267, and PPL268 are the assets that are impacted.

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According to The Punch report, the five blocks were part of the original 12 that NUPRC Chief Executive Gbenga Komolafe announced at the Miami International Roadshow for the 2024 licensing round, which was organized by the NUPRC in association with Zetse Advisory & Consulting and the Petroleum Technology Association of Nigeria.

First identified by Komolafe, the twelve oil blocks were PPL 300-CS, PPL 301-CS, PPL 3008, PPL 3009, PPL 2001, PPL 2002, PML 51, PPL 267, PPL 268, PPL 269, PPL 270, and PPL 271.

Assets eliminated due to Legal challenges

The NUPRC reported that five additional assets were eliminated due to legal challenges, even though they had announced that the assets up for grabs would be expanded.

The NUPRC said in a notice,

“Due to newly acquired data from the Multiclients, the Assets on offer in the ongoing Licencing Round will be increased.

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“However, PPL3008, PPL3009, PML51, PPL267, PPL268 have been removed from the Bid process due to ongoing litigation.”

The NUPRC added,

“Also, in accordance with the published guidelines, we have earlier indicated that some of the assets on offer should be applied as a single unit, namely: PPL 300-CS & PPL 301-CS, PPL 2000 and PPL 2001.”

The commission did not specify if the five impacted assets are part of the total 17 being offered.

Commission working with multi-client companies

Earlier the head of NUPRC indicated in a statement that 17 deep offshore oil blocks will be included in the 2024 licensing cycle.

Komolafe said in a statement recently,

“In pursuit of the commission’s commitment to derive value from the country’s abundant oil and gas reserves and increase production, the commission has been working assiduously with multi-client companies to undertake more exploratory activities to acquire more data to foster and encourage further investment in the Nigerian upstream sector.

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“As a result of additional data acquired in respect of deep offshore blocks, the commission has added 17 deep offshore blocks to the 2024 Licensing Round."

The head of NUPRC added that the schedule for the 2024 Licencing Round has been adjusted to enable interested investors to take advantage of the increased chances.

He said,

“Registration/submission of pre-qualification documents which was initially scheduled to close on June 25, 2024, has been extended by 10 days and will now close on July 5, 2024.

“Data access/data purchase/evaluation/bid preparation and submission which was initially scheduled to open on July 4, 2024, and close on 29/11/24 will now start on July 8, 2024, and close on 29/11/24 as previously scheduled.

President Bola Tinubu reportedly cut the signature bonus that winning bidders would receive from approximately $200 million to $10 million during the pre-bid conference that was recently held in Lagos.

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The NUPRC then revealed that investments made in deepwater will now receive a $10 million signature bonus, while onshore and shallow water investments will only receive $7 million.

According to Ahmad Abdullahi, Assistant Director of Multiclient Surveys and Regional Studies at NUPRC, interested bidders must have a financial capacity of around $200 million for deep offshore and $150 million for shallow water and onshore in order to be eligible for the bid round.

26 oil blocks up for grabs

Legit.ng reported that the Nigerian government has announced that four International Oil Companies (IOCs) are set to divest from 26 oil blocks in the country.

According to Gbenga Komolafe, Chief Executive of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), the proposed oil blocks are owned by Nigerian Agip Oil Company, ExxonMobil (Mobil Producing Nigeria Unlimited), EQUINOR, and Shell (Shell Petroleum Development Company of Nigeria Limited).

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This follows an earlier announcement by British energy major Shell of plans to sell off its Nigeria onshore division SPDC for up to $2.4 billion, having already flagged its exit from the troubled Niger Delta.

Source: Legit.ng