The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has officially launched the 2024 Licensing Round, a pivotal moment in Nigeria’s energy landscape. This marks the first licensing round since the implementation of the Petroleum Industry Act (PIA) in August 2021, setting the stage for significant advancements in hydrocarbon development.
At the Commercial Bid Conference held today (Wednesday, December 18), in Lagos, Engr. Gbenga Komolafe, the Commission Chief Executive, addressed industry leaders and media representatives and underscored the importance of this initiative: “This Licensing Round is not merely a commercial exercise; it is a bold declaration that Nigeria is ready for business.” The conference aims to transparently unveil the winners of the licensing round while discussing strategies to harness Nigeria’s vast hydrocarbon resources.
The 2024 Licensing Round, launched in May, represents a significant leap in Nigeria’s hydrocarbon development strategy. The licensing round offers twenty-four (24) carefully selected blocks spanning onshore, shallow water, and deep offshore terrains. Complementing these are the seven deep offshore blocks from the 2022 Mini Bid Round, bringing the total to thirty-one (31) blocks. These assets cumulatively hold enormous potential for economic growth, energy security and technological advancement. With 209 trillion cubic feet of natural gas reserves and over 37 billion barrels of oil reserves, Nigeria is poised to capitalise on its untapped potential.
Key objectives of the licensing round include:
Growing our country’s oil and gas reserves through aggressive exploration and development.
Boosting production while expanding opportunities for gas utilisation across the value chain.
Enhancing energy security and economic growth.
Attracting investments while creating employment opportunities and enabling technology transfer.
Optimising the value of our petroleum assets and ensuring sustainable development of Nigeria’ untapped potentials.
Engr. Komolafe emphasised commitment to transparency and accountability in managing Nigeria’s oil and gas sector, aligning with global best practices and principles of the Extractive Industry Transparency Initiative (EITI). The commercial bids will be opened through an electronic bidding process supervised by representatives from NEITI, the Federal Ministry of Finance, and the Federal Ministry of Petroleum Resources.
Engr. Komolafe highlighted several unique features of the Licensing Round designed to foster an investor-friendly environment, to include:
Investor-friendly terms with reduced signature bonuses and the recent Presidential Executive Orders on non-associated gas (NAG) development, optimised local content and the reduction of contracting costs and timelines, we have fostered an enabling environment that strengthens Nigeria’s competitiveness in the global energy market.
Streamlined Allocation: This round prioritises single applicants or well-established consortia to ensure greater efficiency and accountability, as against the 2020 MFBR 2020 where the allocation of blocks to multiple companies presented certain challenges.
Collaboration for Local Content Development: This bid round has also been designed to foster collaboration between reputable local companies and their international counterparts, promoting local content development, creating employment opportunities and facilitating technology transfer.
Sustainability Commitments: Environmental and social considerations remain a top priority, and we will ensure that all exploration and production activities adhere to global best practices while promoting harmonious and peaceful coexistence between oil and gas companies and their host communities.
Following this conference, successful bidders will receive their blocks within months; payments of Signature Bonuses will be made in full before the granting of licenses or leases; awarded blocks will undergo aggressive exploration and development in line with minimum work programme obligations; capacity building and job creation for Nigerians will be proritised, while delivering optimal value to both our local and foreign investors and government will continue to integrate sustainability measures into all exploration and production activities, safeguarding host communities and protecting the environment.
As Nigeria embraces this transformative opportunity for growth driven by favorable fiscal provisions under the PIA and Presidential Executive Orders, Engr. Komolafe expressed optimism about early final investment decisions (FIDs), increased exploration activities, and prompt first oil and gas production across all terrains.
The CCE paid glowing tribute to President Bola Ahmed Tinubu for his support for the exercise, the first in showcasing transparency, fairness and competitiveness in line with the provisions of the PIA. He was optimistic that the implementation of the bid will enjoy the incentives in the Presidential Orders and initiatives recently released.
He therefore urged stakeholders to seize this moment to develop Nigeria’s oil and gas resources responsibly and inclusively.
