The federal government has concluded plans to auction 7 deep offshore oil and gas blocks for the first time in 15 years, off the city of Lagos in the month of November.
This is coming at a time the Nigerian government is trying to ramp up crude oil production and tackle the rising cases of oil theft and pipeline vandalism, especially in the Niger Delta region of the country.
This was made known by the chief executive officer of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Gbenga Komolafe, during a chat with Reuters on Saturday, where he said the commission intends to conduct a transparent bidding process for the oil blocks.
The decision to auction the deep offshore assets is coming months after the NUPRC concluded the sales and allocation of 57 marginal fields, basically for indigenous players, after a long process to help improve the country’s falling oil production efforts.
What the NUPRC chief executive is saying
Komolafe said that all the blocks are in the Lagos waters with proximity to the export free trade zone in the state and not Niger Delta, where most of the country’s crude oil and gas deposits, as well as facilities, are located.
The NUPRC boss, during the interview, said, “We will announce by next month the intention to conduct a transparent bidding round for seven oil blocks. All the blocks are in the Lagos waters, not in the Niger Delta, with the added advantage of its proximity to the export-free zone in Lagos.’’
What you should know
Apart from marginal fields, Nigeria last conducted bidding for 45 oil blocks in 2007 even when the court had stopped the sale of two that were under litigation between Shell and the Nigerian government.
The last time the federal government issued dozens of such permits was between 1993 and 2007, and it was meant to open up the ocean floor to oil and gas production.
In 2005, then President Olusegun Obasanjo launched an open auction process and said Nigeria would no longer award lucrative drilling licenses on a discretionary basis.
However, the auctions drew criticism that they were neither as transparent as they should be nor as successful in terms of securing investment in Nigeria.
The deep water offshore crude oil production, which is dominated by international oil companies (IOCs) like Shell, TotalEnergies, ExxonMobil, and others, had accounted for about 35% of oil output in the country. This has, however, increased as onshore operators struggle with vandalism, oil theft, and others.
Good for Nigeria. But why the emphasis on “All the blocks are in the Lagos waters, not in the Niger Delta, with the added advantage of its proximity to the export-free zone in Lagos.’’
Who says Niger Delta offshore oil has not helped Lagos transform to into an economically viable state. Is the NUPRC boss saying that this oil and gas discoveries offshore Lagos is only a Lagos and Western Nigerian thing? So the Niger Delta has been raped and weakened for the sake of Nigeria but the oil and gas offshore Lagos and elsewhere will not welcome Niger Delta interests?
My conclusion is that the NUPRC boss is a tribalist and cannot be a fair referee in the distribution of this new wealth for all Nigerians.
I think he was imputing that investors will not have to deal with the vandalism, sabotage, destruction, armed robbery, kidnapping, extortion or murder…er, sorry, I mean ‘militancy’… associated with petroleum prospecting in the Niger Delta region.
It is the same people like NNPC who built all those negative attributes on the Niger Delta people. So they believe that if their new oil and gas discoveries offshore lagos are mined and and sold by a few greedy business folks with support of the same NNPC, the peoples of lagos and the west will surrender and just continue to see their commonwealth being carted away. No wahala.