2024 Oil-Block Licensing Round: Shows Nigeria’s Resilient, Sustainable Petroleum Industry – NUPRC

The 2024 Oil-Block Licensing Round is not merely a transactional opportunity but a testament to Nigeria’s commitment to advancing a resilient and sustainable Industry, according to the oil and gas industry regulator, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).

The Commission told industry stakeholders in Abuja on Tuesday that as the country stands at the threshold of history in its energy sector, it requires the collaboration of all involved to harness the opportunities that promise not only to meet the immediate needs of their growing economies but also to secure a sustainable future for the coming generations for shared prosperity.

The Commission Chief Executive, Engr. Gbenga Komolafe, who represented the regulator at the gathering of oil and gas industry professionals, said the Pre-Bid Conference for 2024 Licensing Round provides an opportunity for the exploration of the vast opportunities in this year’s licensing round – an unprecedented opportunity to unlock Nigeria’s vast hydrocarbon potential, attract investment and propel the nation towards greater economic and shared prosperity.

The Conference, hosted by NUPRC, deliberated on pathways to the country’s collective energy future as it progresses through an era of unprecedented challenges and opportunities. Nigeria has embarked on a transformative agenda that aligns with the most stringent global standards and commitments.

The recent Presidential Executive Orders issued in March this year, aimed at improving the efficiency and attractiveness of Nigeria’s oil and gas sector, were meant to incentivise oil and gas development and introduce measures to balance the implementation of Nigeria’s Oil and Gas Industry Content Development Act 2010 and ensure that local content bottlenecks do not hinder oil and gas development. It also includes directives on reducing contracting costs and timelines to enhance the global competitiveness of our oil and gas industry and achieve a higher rate of return on oil and gas investments.

Nigeria is endowed with abundance of crude oil and condensate, and natural gas reserves representing above 30% and 33% respectively of the entire Oil and Gas reserves in Africa aside abundant mix of other renewable energy resources. In a bid to exploit and optimise these abundant hydrocarbon resources, Section 7(t) of the Petroleum Industry Act (PIA) 2021 empowers the NUPRC to conduct bid rounds for the award of Petroleum Prospecting Licenses (PPLs) and Petroleum Mining Licenses (PMLs) in line with the PIA and applicable regulations.

It is on this premise that the Federal Government recently announced the commencement of the 2024 Licensing Round at both in-country and outside the shores of the nation. It would be recalled that the NUPRC commenced the announcement at the maiden edition of NEITI Dialogue Session, 2024, where the bid processes were thoroughly interrogated by the civil society and the media.

This was subsequently followed by the announcement of the commencement of the bid round at the 2024 OTC in Houston, a roadshow in Miami, the African Energies Summit in London and Invest in Africa Energy Summit in Paris, all organised by major industry players. The Commission aims to project and attract robust local and foreign investors that will be participating in the bid exercise.

NUPRC is therefore committed to conducting the licensing round in a fair, competitive and transparent manner, and ensuring a level playing field for both indigenous and international investors. Our approach is underpinned by the robust legal framework of the PIA, which ensures compliance with best practices to boost investors’ confidence.

The Commission has issued a licensing round guideline and published a licensing round plan for the blocks. This round introduces some meticulously selected blocks across diverse geological spectrums, from the fertile onshore basins to the promising continental shelves and the untapped depths of our deep offshore territories. Each block has been chosen for its potential to boost our national reserves and stimulate economic vitality. Subsequently, on 13th May 2024, the Commission opened a dedicated bid portal to allow prospective bidders to register/submit pre-qualifications documents latest by the stipulated 25th June 2024 deadline.

In partnership with its multi-client partners, the Commission has acquired more geological data resulting in the identification of more prospective blocks. The newly identified blocks will be added to the pool of blocks originally scheduled for the bid exercise, and their details will be made available on the bid round portal. In addition to these blocks, the seven deep offshore blocks from the 2022 Mini-Bid Round Exercise which cover an area of approximately 6,700 km2 in water depths of 1,150m to 3,100m shall also be concluded along with this licensing round.

To ensure a seamless execution of the licensing round exercise, the NUPRC, in collaboration with its National Data Repository and multi-client partners, guarantees access to comprehensive and high-quality geological data, facilitating informed decision-making and strategic investments. The blocks on offer have extensive 2D and 3D seismic data coverage, including multi-beam and analogue data. Additionally, a 3D reprocessed Pre-stack Time Migration of remarkable quality is also available to prospective bidders. The availability of advanced seismic datasets and analytical tools via our dedicated portals exemplifies our commitment to excellence and technological advancement.

The licensing round is expected to be a huge success for Nigeria and a big step towards growing the nation’s oil and gas reserves through aggressive exploration and development efforts, boosting production, expanding opportunities for gas utilisation and end-to-end development across the value chain, strengthening energy security and economy, providing an occasion to gainfully engage the pool of competent companies in the oil and gas sector with multiplier effect in employment opportunities, enabling transfer of technology, value optimisation from our petroleum assets and attracting investments. In addition, the licensing round presents us with the opportunity to reinforce Nigeria’s commitment to openness and transparency in line with the principles of the Extractive Industry Transparency Initiative (EITI).

On the global scale, the licensing exercise will be beneficial to all stakeholders and in the long run contribute to long-term global energy sufficiency. The process was formulated taking into consideration the global energy sustainability goals. The implementation process will, in addition to technical and commercial considerations, pay required attention to strategies, processes and implementable plans consistent with net zero carbon emission targets, eliminating gas flares, as well as overall environmental, social and governance (ESG) considerations.

The oil and gas industry in Nigeria has embraced the reality of energy transition and is taking strategic position to leverage on the opportunities presented by the unfolding era. However, it is noteworthy that recent events around the globe indicate that fossil fuels will continue to be a core part of the global energy mix well into the future, even beyond the set 2050 targets for achieving net-zero carbon emissions.

A review of Welligence Energy Analytics reports on licensing rounds across the globe including Brazil, Guyana, Angola, Middle East, North Africa and South East Asia revealed that the era of huge front-loaded signature bonuses is over. Accordingly, Nigeria under President Bola Ahmed Tinubu, as the Honourable Minster of Petroleum Resources, has proactively vacated barriers to entry for investment in exploration blocks being offered, in both the 2022 deep offshore bid round and the 2024 licensing round, in line with international best practices.

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