Nigeria is set to auction undeveloped oil and gas blocks next year, with a focus on advancing natural gas development in alignment with the country's commitment to the UN Sustainable Development Goals, as announced by the oil regulator on Wednesday.
This marks the third auction of blocks since the enactment of a comprehensive oil reform law in 2021, aimed at increasing oil production to support government expenditures.
The licensing round signifies a significant commercial undertaking and underscores Nigeria's commitment to fostering a robust business environment, stated Gbenga Komolafe, Chief Executive of the Nigerian Upstream Petroleum Regulatory Commission, at a Lagos bidding conference.
He further announced the conclusion of the offshore oil block bidding process, initiated in February, with successful bidders anticipated to receive their licenses within the next few months.
The head of the NUPRC indicated that the initiative will emphasize the development of natural gas to bolster Nigeria's dedication to the United Nations Sustainable Development Goals (SDGs).
He also mentioned that the commission is focused on restoring investor confidence in the sector, a goal that has been achieved by aligning its operations with the provisions of the Petroleum Industry Act (PIA).
This initiative is not discretionary; it's mandated by the Petroleum Industry Act. The Act requires the commission to conduct licensing rounds.
Although the Act doesn't mandate annual rounds, we're committed to annual licensing rounds to ensure the growth, preservation, and optimization of hydrocarbon resources. Consequently, following the 2024 round, another will commence in 2025, he said.
Furthermore, the NUPRC chair announced the commission's commencement of inactive asset reclamation, as mandated by the Petroleum Industry Act's (PIA) "drill or drop" provision.
The Petroleum Industry Act includes a specific provision addressing "drill or drop" stipulations. We've been actively engaged with industry partners to expedite the return of previously unexplored acreage and resources to active production, Komolafe noted.
He further mentioned that the commission plans to reintegrate these assets into the available pool, making them accessible for bidding in the upcoming licensing round.
Additionally, he indicated that participants in the 2024 bidding round will be promptly updated on these recent developments.