Nigeria Begins 2024 Bid Rounds With 12 Greenfield Blocks On Offer
By Juliet Ukanwosu
The Federal Government says it has commenced the 2024 bid rounds with 12 acreages on offer. The blocks are located in the Niger Delta, with six in the continental shelf, four in the deepwater, and two onshore.
Disclosing this in Abuja on Monday, the Chief Executive, of the Nigerian Upstream Petroleum Regulatory Commission, (NUPRC), Gbenga Komolafe, stated that the 12 greenfield acreages will be on offer alongside the seven deepwater blocks offered in the 2022-2023 bid round that was put on hold due to the 2023 general elections.
Komolafe who made the disclosures during his presentation at the maiden Nigeria Extractive Industries Transparency Initiative (NEITI) House Dialogue, stressed that the bid round will be “based on a fair, transparent and competitive bidding process in line with Section 73(1) of the Petroleum Industry Act (PIA).”
He said the qualifying criteria will be based on three major categories which includes technical competence, financial capacity and viability as well as health, safety and environmental (HSE) record.
With regards to technical competence, he explained that a company must possess at least five years experience as an operator in offshore and continental shelf and production of at least 40,000 bopd in offshore, and at least 5,000 bopd in both continental shelf and onshore.
Source: NUPRC
Similarly, a bidder must demonstrate financial capability of minimum average annual turnover of US$200 million, minimum cash in bank of US$200 million, market capitalization of not less than US$1 billion, bank guarantee to the tune of US$200 million and parent company guarantee to the tune of US$200 million, in addition to HSE policy statements, evidence of HSE management system and certificates (ISO).
Komolafe added that “while the companies will be required to submit financial results for 2019-2023 period, the financial results of 2023 will be considered as outliers due to pandemic and will not negatively affect the financial qualification should the company meet the minimum requirement for the other four years.”
He further assured that the Commission has put in place regulations to create a conducive investment environment by ensuring regulatory certainty, vacating entry barriers and promoting global competitiveness.
On NUPRC regulatory action plan and the petroleum resources optimisation strategies, the Chief Executive said so far the agency has developed 25 Regulations pursuant to the PIA with 12 gazetted and 13 awaiting gazetting.
While stating that it would be difficult to determine how much the nation stands to earn from the bid rounds because the assets on offer are mostly greenfield assets, Komolafe however, noted that the country would earn billions of dollars from the assets in terms of royalties, taxes and other levies to be generated from the bid round.
Source NUPRC
Speaking further Komolafe informed that government is targeting injection of $3 billion capital investment to fund projects in the Nigerian Gas Flare Commercialisation Programme (NGFCP), adding that the potential economic and social benefits includes 300,000 jobs, with six million households given access to clean energy through LPG.
He listed other benefits to include 20million tons of C02 emissions per year eliminated, 600 MT of LPG per year unlocked and 2.5 GW power generated from new and existing IPPs. Overall he said an estimated 300 mscf/d of gas will be taken off flare, resulting in Niger Delta communities benefiting from reduced flaring and improved economic development.
Speaking earlier at the event, Dr. Orji Ogbonnaya Orji, Executive Secretary of NEITI, explained that the NEITI House Dialogue is a quarterly briefing of NEITI stakeholders which will host notable policy makers in Nigeria’s extractive industries and related sectors, to address issues that are of interest and topical to the industry.
Dr. Orji Ogbonnaya Orji, Executive Secretary, NEITI
“The NHD will also get the invited policy maker to provide update or status report on the implementation of NEITI report recommendations as it concerns the agency. This is with a view to deepen not just government oversight and reforms in the extractive sector, but make it inclusive of all stakeholders. Selected section of company representatives, media and civil society actors will be invited to the programme to demonstrate the multi-stakeholders’ nature of the EITI process,” Orji said.
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