The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) on Tuesday disclosed that the era of collecting huge oil signature bonuses which impede the capacity of bid winners to make quick and requisite investments in the new assets was over.
Speaking at the African Oil Industry Opportunities Session organised by the Petroleum Technology Association (PETAN) at the Offshore Technology Conference (OTC), Houston, Texas, the commission also promised to conduct fair and transparent bids.
During the last marginal field bid round, some participants had alleged that the ‘Competent Person’s Report’ exaggerated the value of the assets, stating that based on that false value, a huge signature bonus was extracted from the awardees.
They argued that the cost front-loading of the assets rendered most of them sub-commercial, explaining that most of the awardees will not make progress without the government returning their money to them.
But Komolafe told his audience in the US that the President Bola Tinubu administration had become a lot more proactive and pragmatic in ensuring that entry fees do not constitute a barrier to entry for investment in exploration blocks offered
“In addition, recognising that the era of frontloaded huge signature bonuses is over, Nigeria under President Bola Ahmed Tinubu, as the Honourable Minster of Petroleum Resources has become a lot more proactive and pragmatic in ensuring that entry fees do not constitute a barrier to entry for investment in exploration blocks offered.
“As a responsible regulator, the Commission will continue to review the prevailing global investment climate to ensure that the entry fees associated with all licensing rounds are competitive in the context of global realities.
“Broadly speaking, competitive entry fees that are responsive to prevailing realities will be adopted in the 2024 Block licensing rounds. Also, considerations for the commerciality of projects will be made on a case-by case basis for the determination of appropriate entry fees.
“In the case of the 2024 licensing round, the commission will implement suitable models that support investments and guarantee value for stakeholders in accordance with the government aspirations,” the NUPRC chief executive stated.
Komolafe explained that the 2024 block licensing round was scheduled to last for approximately nine months and invited all interested parties to visit the dedicated NUPRC portal.
He emphasised that the guidelines for participation were structured to ensure fairness and strategic partnership, fostering not just economic returns but also technological exchange and capacity building.
According to him, the 2024 block licensing round is not merely a transactional opportunity, but a testament to Nigeria’s commitment to advancing a resilient and sustainable industry.
Under Tinubu, Komolafe stressed that Nigeria has embarked on a transformative agenda that aligns with the most stringent global standards and commitments.
He stated that the recent Presidential Executive Orders issued in March this year, were aimed at improving the efficiency and attractiveness of Nigeria’s oil and gas sector.
“Nigeria is endowed with 37.5 billion barrels of crude oil and condensate reserves and 209.26 Trillion Cubic Feet of Natural Gas Reserves representing above 30 percent and 33 percent respectively of the entire oil and gas reserves in Africa aside abundant mix of other renewable energy resources.
“ It is towards the exploitation and optimisation of this abundant hydrocarbon resources that Section 7(t) of the Petroleum Industry Act (PIA) empowers the NUPRC as the industry regulator to conduct bidding rounds for the award of PPLs and PMLs pursuant to the Act and applicable Regulations.
“This round introduces 12 meticulously selected blocks across diverse geological spectra — 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 bolster our national reserves and stimulate economic vitality.
“The NUPRC on behalf of the Federal Republic of Nigeria is 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 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 12 blocks 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).
“ 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,” he added.
To ensure the seamlessness of the licensing round exercise, the NUPRC, in collaboration with Nigeria’s National Data Repository and multi-client partners, he said, now guarantees access to comprehensive and high-quality geological data.
Komolafe said that this will facilitate 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,” he emphasised.
He added that the licensing round was expected to be a huge success for Nigeria and is 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.
According to him, it will also strengthen energy security and the economy, providing opportunities to gainfully engage the pool of competent companies in the oil & gas sector with a multiplier effect in employment opportunities.
Komolafe stressed that it will enable transfer of technology, valorising petroleum assets in the Nigerian territory 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),” he stated.
Emmanuel Addeh and Peter Uzoho
Follow us on:
