Nigeria is expanding the number of oil blocks available for auction in its 2024 licensing round and extending the deadline due to strong investor interest.
The initial offering of 19 onshore and deepwater oil blocks in April has been increased to include an additional 17 deep offshore blocks.
Increased Exploratory Activity and Data Acquisition
The decision to expand the licensing round and extend the deadline stems from increased exploratory activities and the acquisition of additional data. Gbenga Komolafe, head of the Nigerian Upstream Regulatory Commission (NUPRC), highlighted the “tremendous interest from investors” in the expanded offer.
The registration deadline, originally set for June 25th, has been extended by 10 days. Bid submissions will now open on July 8th and close on November 29th, allowing potential investors more time to evaluate the opportunities.
Efforts to Deepen Resource Exploitation
The oil regulator aims to further exploit Nigeria’s vast oil and gas reserves, estimated at 37.5 billion barrels of crude oil and 209.26 trillion cubic feet of natural gas. To attract investors, the regulator has lowered entry fees, known as signature bonuses, from around $200 million per field to $10 million.
The bidding process has been streamlined, with the promise of fairness and transparency, and online submissions are accepted through the NUPRC website. Bidders have the flexibility to lease single oil blocks or clusters, providing greater customization to suit their investment strategies.
Competition with African Rivals
Nigeria aims to compete with African rivals Angola and Namibia by enhancing the ease of acquiring oil blocks. This move is crucial as Nigeria, a member of OPEC, has experienced a decline in oil production from approximately 2 million barrels per day a decade ago to just over 1.4 million barrels per day currently.
Oil majors are increasingly shifting their focus from onshore fields, which are vulnerable to sabotage and spill-related compensation claims, to deepwater fields where disruptions are less frequent. This transition aligns with industry trends towards more secure and stable production environments.