The oil sector in Nigeria is preparing to receive new investments during the current year (2023), after the competent authority announced the launch of a new round of bids for oil exploration in a number of offshore blocks.
The Nigerian Petroleum Regulatory Authority announced that 7 offshore oil blocks will be offered to interested companies from all over the world, according to a press release.
The authority hopes the success of this mini-tour, as a prelude to launching larger rounds aimed at promoting oil exploration activities in Nigeria through deep waters, according to the local Punch website.
Oil exploration in Nigeria
The new round is scheduled to be launched in accordance with the provisions of the amended Petroleum Industry Act in Nigeria in 2021, and the new licensing regulations issued during the past year (2022), as monitored by the specialized energy platform.
The 7 offshore blocks offered are located within the Gulf of Guinea off the coast of Nigeria, 150 km southeast of the port of Lagos.
The squares are also located at depths of between 1,000 and 2,000 metres, according to details of the tour seen by the Specialized Energy platform.
The 7 marine blocks carry a sequential numbering, starting from “BBL 300 Do” and ending at “BBL 306 Do” numbering, and they are all located in the deep waters of the Nigerian coast.
Bid submission date
The authority will hold a conference on the 16th of this month, to respond to the inquiries of all those involved in applying to the mini-bidding round in the oil sector in Nigeria, with the door for submitting files and offers opening on January 31, 2023, according to the specialized business post.
The Nigerian Petroleum Regulatory Authority launched a bidding round in November 2022, which included 7 offshore blocks at depths ranging from about 1,200 to 3,100 meters.
This is the first round after a 15-year hiatus, as dozens of licenses were previously issued to a number of foreign companies between 1993 and 2007, and then oil exploration licenses in Nigeria stopped since that date.
All exploration licenses were issued during the past 15 years, according to the provisions of the old oil industry law issued in 1969, which prompted the legislative authorities in the country to amend it after the sector resumed its activity.
Oil theft losses
The new bids for oil exploration in Nigeria come at a very difficult time for the country, which has been suffering from organized oil theft for years, which has led to a decrease in its total production to the lowest level in 32 years, according to what was monitored by the specialized energy platform in September 2022.
The phenomenon of theft caused the oil sector in Nigeria to incur losses of about 470,000 barrels per day, equivalent to $700 million per month, according to local data, which estimated total losses over 8 months at $2 billion.
It also caused Nigeria to drop from the top of the largest African producer, in favor of Angola, due to its inability to reach the production quotas set by OPEC during the period between March and September (2022).
Oil discovery in Nigeria
Since assuming power in 2015, Nigerian President Muhammadu Buhari has been interested in encouraging domestic and foreign investment in the oil and gas sector, and his interest in this file has increased significantly over the past two years.
On November 22, 2022, Nigeria announced a huge oil discovery in the Kolmani project along the northern Nigerian states of Gombe and Bauchi, with an initial production capacity of 50,000 barrels per day, according to the specialized local Punch website.
The reserves of the new discovery exceed one billion barrels of crude oil, which means that Nigeria’s total oil reserves have risen to approximately 38 billion barrels.
The plans to develop the Kolmani field include the construction of an on-site oil refinery with a capacity of 120,000 barrels per day, a natural gas processing plant with a capacity of 500 million cubic feet per day, in addition to the construction of a 300-megawatt power plant with a fertilizer production plant with a production capacity of 25,000 tons per year.
This project is being implemented by a Nigerian consortium led by the Nigerian National Oil Company Limited (NBC), which holds the right to concession in the field, which holds exploration licenses No. 809 and 810, with a production sharing contract system, according to the specialized energy platform.
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