Nigeria’s oil blocs not for politicians — Minister

Heineken Lokpobiri, Minister of State for Petroleum Resources, clarifies that the 17 Nigeria oil blocs up for sale in the 2024 bidding round are aimed at investors with financial capacity and technical competence, not politicians.

Speaking at a conference organized by PETAN during the 2024 Offshore Technology Conference in Houston, Texas, Lokpobiri emphasized the need for responsible investment to drive development in the sector.

In the past, the award of Nigeria oil blocs often resulted in non-development, with over 90% of marginal fields remaining undeveloped due to awards lacking technical and financial considerations.

“We have noticed a lot of idle blocs and little or no investment done on them in the last three years of acquiring them.

“I can tell you for fact that over 90 per cent of owners of these oil blocs are seeking for renewal without commencing or investing on them.

“In this regard, we are saying no more to that, and hence, those seeking for blocs must be financially and technically capable to turn it around and not mere portfolio investors.

“These set of investors are those we consider as men and not boys in the industry.

“The blocs are not for politicians. So, we are downplaying that kind of investors in this new bid rounds.”

Lokpobiri stressed the importance of ensuring that investors are capable of turning around the blocs for development, rather than being mere portfolio investors.

To encourage investment, the government has removed the 200 million signature bonus tied to bloc ownership, shifting focus to operations and investment.

“However, we have taken away the 200 million signature bonus tied to blocs ownership.

“What we have tried to achieve is to tie such to operations and investment which will encourage investors and drive investment speedily on a field.”

Lokpobiri also highlighted efforts to ensure a seamless bidding round this year, working closely with the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).

“I have worked closely with the NUPRC to ensure that we achieve a seamless transition and bid round sales this year,” Lokpobiri said.

Gbenga Komolafe, CEO of NUPRC, emphasized the recent Presidential Executive Orders issued in March aimed at improving efficiency and attractiveness in Nigeria’s oil and gas sector.

The bidding round introduces twelve selected blocs, supported by the Petroleum Industry Act 2021, to boost national reserves and stimulate economic vitality.

Komolafe outlined the comprehensive geological data available to prospective bidders, facilitating informed decision-making and strategic investments.

“This round introduces twelve meticulously selected blocs  across diverse geological spectra — from the fertile onshore basins to the promising continental shelves and the untapped depths of our deep offshore territories.

“Each bloc has been chosen for its potential to bolster our national reserves and stimulate economic vitality.

“Our approach is underpinned by the robust legal framework of the Petroleum Industry Act 2021(PIA), which ensures compliance with best practices to boost investors’ confidence.

“In keeping with the provisions of the PIA and regulations made under the Act, the Commission has issued a licensing round guideline and published a licensing round plan for the twelve blocs.

“Namely 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).”

He highlighted the licensing round’s potential for economic growth, employment opportunities, technology transfer, and energy security, aligning with global energy sustainability goals.

NUPRC has commenced a roadshow in Houston for oil bidders, signaling the beginning of the bidding process for Nigeria’s oil blocs.