Nigeria Puts Up 12 Oil Blocks for Grabs in 2024 Licensing Round

Nigeria has put forth 12 oil blocks in a fresh licensing round, aiming to complement a previous round involving seven blocks that was halted after last year’s governmental transition.

Gbenga Komolafe, the CEO of the upstream regulator NUPRC, highlighted that the selection of these 12 blocks was meticulous, targeting international investors equipped with both financial capabilities and technical know-how. The blocks are strategically distributed across three geological terrains.

PGS, a Norwegian geophysical services firm assisting with seismic data, revealed that among the offerings, two blocks are situated onshore in the Niger Delta, six are on the continental shelf, and the remaining four are located in deep waters.

The licensing round is slated to span nine months, with ministerial approval and contracting anticipated by January 2025, marking a crucial step in Nigeria’s efforts to attract investment and revitalise its oil sector.

To foster the commercial viability of investments, Komolafe emphasised that entry fees in the upcoming licensing round will be competitive. He emphasised a departure from the previous practice of hefty upfront signature bonuses, stating, “The era of front-loaded, huge signature bonuses is over.”

Echoing Komolafe’s sentiment, Nigeria’s oil minister, Heineken Lokpobiri, stressed the importance of minimising entry barriers. However, he highlighted the round’s emphasis on holding successful bidders to stringent timelines, making it favorable for investors prepared to commence exploration promptly.

Furthermore, Lokpobiri disclosed Nigeria’s intention to concurrently allocate licenses for seven offshore blocks from the 2022 licensing round alongside those from the 2024 round. He emphasised that the 19 oil blocks available for bidding are exclusively earmarked for capable investors.

The bidding process for the seven offshore blocks commenced in December 2022 and was initially slated for completion by May 2023. However, concerns surrounding the transition to a new government prompted a delay, pushing the deadline to July. Progress on the 2022 licensing round stalled following the inauguration of President Bola Tinubu’s administration on 29 May last year.

President Tinubu has set an ambitious target to elevate Nigeria’s crude production to 2.6 million barrels per day by 2027, surpassing the country’s current commitment of 1.5 million barrels per day under the OPEC+ agreement.

Nigeria launched an international roadshow for the new licensing round on 7 May in Houston, Texas, marking the first leg of the journey. The roadshow’s next stop is scheduled for 14 May in Miami, Florida, as Nigeria endeavors to attract global interest and investment in its oil sector.