The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has recently announced that it has begun the process for the 2024 oil bid round, which includes offering 12 oil blocks and five deep offshore assets from the previous year's bid exercise. The commission has also disclosed that it has started its 'due diligence' on Renaissance Consortium's planned acquisition of Shell Petroleum Development Company (SPDC) onshore oil assets for $2.4 billion.
The Chief Executive of the NUPRC, Gbenga Komolafe, spoke at two separate events in Abuja, at the maiden NEITI House Dialogue and at a workshop to streamline the issues in the proposed divestment of the participating interests held by the SPDC. The new green field oil blocks on offer include six on the continental shelf, four deep offshore blocks, and two onshore blocks in the Niger Delta. Komolafe explained that the commission had put in place regulations to create a conducive investment environment by ensuring regulatory certainty, vacating entry barriers, and promoting global competitiveness.
The bidding process is expected to conclude by January next year. Interested parties are required to meet certain criteria before they can participate. The NUPRC boss stressed that the licensing round will be conducted in a fair, transparent, and competitive bidding process in a non-discriminatory manner, as stipulated in Sections 73 and 74 of the Petroleum Industry Act (PIA). The criteria required for acquiring the blocks include technical competence, financial capacity, and viability.
The SPDC JV assets are currently operated by Shell on behalf of its JV partners, NNPC, and Total Upstream Nigeria Limited, as well as Nigeria Agip Oil Company. 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. The assets hold P3 (possible) reserves estimated at 2.85 billion barrels of oil, 850.85 million barrels of condensate, 11.3 trillion cubic feet of associated gas, and 12.26 trillion cubic feet of non-associated gas.
The NUPRC has developed a divestment framework consisting of seven cardinal pillars to guide the assessment of applications for ministerial consent to the divestment of the participating interests held by the SPDC. The framework includes technical competence, financial capacity, legal requirements, decommissioning and abandonment, host community trust/environmental remediation fund, labour and industrial relations, and data mining. The commission will ensure that potential exposure of the Nigerian government to decommissioning liabilities is averted.
The NUPRC has generated N4.344 trillion in revenues in 2023, a rise of 15% from N3.78 trillion generated in 2022, N2.9 trillion in 2021, and N2 trillion in 2020. According to Komolafe, the regulatory agency is not averse to divestments in the oil and gas sector, emphasizing that the NUPRC is committed to free entry, free exit business principles aimed at encouraging investors in the sector.
In conclusion, the Nigerian oil and gas industry presents an opportunity for companies to invest and potentially boost the country's economy. The commission has put in place regulations to create a conducive investment environment, ensuring regulatory certainty, vacating entry barriers, and promoting global competitiveness. The bidding process for the 2024 oil bid round is expected to conclude by January next year, and interested parties are required to meet certain criteria before they can participate.
