Nigerian Upstream Petroleum Regulatory Commission Launches Oil Bid Rounds

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has announced the commencement of the 2024 oil bid rounds, offering 12 greenfield blocks to investors.

Gbenga Komolafe, the Commission Chief Executive, disclosed this at the NEITI House Dialogue in Abuja.

The bid rounds will include the 5 blocks from the 2022 bid round that were put on hold due to the 2023 general elections. Komolafe assured that the bidding process will be fair, transparent, and competitive, in line with the Petroleum Industry Act (PIA). The 12 blocks on offer consist of six acreages on the continental shelf, four deep offshore blocks, and two onshore blocks in the Niger Delta region.

Why this matters: The 2024 oil bid rounds are expected to generate billions of dollars in revenue for the Nigerian government through royalties, taxes, and other levies. The licensing rounds also aim to enhance the quality of data and attract prospective investors to Nigeria's oil and gas sector.

The NUPRC is also reviewing all awarded assets to identify underperforming blocks and revoke their awards, allowing them to go through a competitive bidding process as per the PIA. Komolafe stated, "We have started the evaluation and examination of the status of all awarded acreages to identify those that are dormant, with a view to revoking them and making them available for competitive bidding in line with the PIA."

In addition to the bid rounds, the NUPRC has awarded 49 gas flare sites under the gas commercialization program. The commission grew its revenue to N4.34 trillion ($9.4 billion) in 2023, a 15% increase from the N3.78 trillion generated in 2022.

The NUPRC has outlined guidelines for the proposed divestment of Shell Petroleum Development Company of Nigerian Limited (SPDC) assets, which hold significant reserves contributing to Nigeria's hydrocarbon resources. The assets have an estimated total reserve of 4.96 billion barrels of oil, 1.77 billion barrels of condensate, 28.16 trillion cubic feet of associated gas, and 28.11 trillion cubic feet of non-associated gas.

Komolafe emphasized that the NUPRC is committed to providing a stable regulatory framework, streamlining procedures, and eliminating barriers to investment in Nigeria's upstream petroleum sector. The commission aims to complete the 17 blocks that were put on offer in 2022, as well as the 12 new bid rounds, by early 2025.

Key Takeaways

• NUPRC announces 2024 oil bid rounds, offering 17 blocks for sale.
• Bid rounds aim to generate revenue, attract investors, and identify underperforming blocks.
• NUPRC awarded 49 gas flare sites, grew revenue by 15% in 2023.
• NUPRC outlines guidelines for divestment of SPDC assets with significant reserves.
• NUPRC committed to providing stable regulatory framework and eliminating investment barriers.