Do you have an Oil block? Do you know who has one? Well, apparently owning an Oil block these days is more of a status symbol if reports from the DPR is reliable. According to the Mr. George Osahon of DPR
“Only one block is currently producing, while less than 30 per cent of blocks are actively worked; several Production Sharing Contracts, PSC, are yet to be signed; bank guarantees yet to be put in place; work obligations are not respected and downstream obligations not performed,”
According to him, in the last three to four years, nothing is happening in Nigeria’s upstream sector, while in the marginal fields sector; only eight oil blocks are currently producing out of the 24 awarded to 31 successful companies. Giving a breakdown of the oil blocks awarded since 2005, Osahon revealed that in 2005, the Federal Government awarded 44 oil blocks across the country; 16 were awarded in 2006, and 17 in 2007.
Why is that? The Vanguard proffered a theory which I find quite compelling
It is widely believed that block owners merely acquire such assets for status ship, as most simply go block hawking when they acquire the licences. While it may have been easy to fling such blocks away to the first bidder, stringent measures introduced have made it impossible for Nigerian oil blocks to be sold so easily in the open market
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– See more at: http://www.vanguardngr.com/2013/08/only-one-out-of-77-oil-blocks-are-producing-dpr/#sthash.vnA2u4dZ.dpuf