SUCCESS NWOGU writes on the benefits, processes and procedures of the 2022/23 mini bid round
For stakeholders in the oil and gas sector in Nigeria, the 2022/23 mini-bid round would provide a veritable mechanism to grow Nigeria’s oil and gas sector. It will also not only generate revenue for the Federal Government but also provide employment opportunities for people as well as enhance their living standard.
NUPRC’s position
Chief Executive of the Nigerian Upstream Petroleum Regulator Commission (NUPRC), Engineer Gbenga Komolafe, said the Mini Bid Round was an opportunity to spur new exploration and drilling activities in the prospective deep waters offshore Nigeria.
He stated that the process was the first in a series of bid rounds, aimed at further development of this prospective petroleum basin to be held in accordance with the Petroleum Industry Act 2021 (PIA), with its enhanced legal and regulatory frameworks that seek to encourage new investors and investments into the next phase of exploration in this region. He assured that the exercise would be managed by the NUPRC, in line with the provisions of the PIA, as the statutory body responsible for ensuring compliance with petroleum laws, regulations, and guidelines in the Nigerian upstream petroleum industry.
He revealed that the National Data Repository (NDR) of NUPRC and multi-client partners were delighted and ready to support the process underpinned by highquality datasets. He said: “Historically, this mini bid round intends to build on the successes of the last bid round that was held in April 2007 during which a total of forty-five (45) blocks, drawn from the inland Basins of Anambra, Benue and Chad; the Niger Delta Continental Shelf; Onshore Niger Delta and Deep Offshore were put on offer.
The 2007 bid round was held under a different regulatory regime (the Petroleum Act, 1969) and generated massive interest and participation with its attended revenue, which made the exercise a success. “In this year’s Mini Bid Round, seven offshore blocks covering an area of approximately 6,700 km2 in water depths of 1,150m to 3,100m are put on offer.
“The success of the Mini Bid Round will ensure all stakeholders gain value from the country’s resources, whilst paying close attention to the reduction in carbon emissions, as well as overall environmental, social and governance (ESG) considerations.” He assured prospective bidders, local and foreign that the exercise would be credible, transparent and competitive as well as in strict compliance with the Petroleum Industry Act (PIA).
For him, this is the first major bid round that is being conducted in the post-PIA. He said the commission was just looking at relative to the number of blocks that are being offered for bid. He noted that in the PIA environment, the commission would ensure the exercise is insulated from political interference and ossification.
Benefits
He said: “It is an exercise that will have a huge benefit to people and federation revenue, the economy of Nigeria. It has multiple benefits for the economy. Right now we have 38 billion barrels of reserves and 7 trillion mt of gas, this exercise will help ramp up the crude reserves for the nation. Aside from that it will equally help in increasing our gas reserves.
“From the data, there is ample evidence that the blocks being offered on sale are very prolific given the fact of their location. Geologically, there is the conviction that they are blocs that are prolific in gas and oil reserves. “Apart from employment generation, by the drilling and production commences, the nation will derive revenue in terms of royalty to the nation. “This is a greenfield block. From the presentation during the panel sessions, it was clearly stated that for this process, enough adequate data is available to bidders so that the bidders will not bid blindly.
The commission has done a lot of work before putting this bid on offer that bidders will be provided adequate data once they log and pay the necessary prime fee, Bidders will not make decisions blindly.”
Buhari’s legacies
Komolafe stated that the passage of the Petroleum Industry Act, 2021 laid a solid foundation for the total transformation of the Nigerian oil and gas industry. Stating that the timely approval of the mini-bid exercise by President Buhari, as the Honourable Minister of Petroleum Resources, has shown a strong commitment to increasing the national oil and gas reserves and production to enhance the revenue of the federation, he added that it was also high-ly remarkable that the approval of the exercise by President Buhari was the first in the last 15 years.
Partnership
The NUPRC boss revealed that the agency had established a committee to engage and collaborate with world-renowned energy consultants, Wood Mackenzie, to ensure that Nigerian petroleum upstream regulations are in line with international best practices, which will form the basis for regulating the awardees of the seven deep offshore blocks offered in the 2022/2023 mini bid round exercise.
Offshore blocks
Komolafe said that in compliance with the provisions of the Petroleum Industry Act (PIA) 2021 and regulations made pursuant to the Act, the Commission had issued a licensing round guideline and published a licensing round plan for a total of seven (7) deep offshore open blocks (PPL-300-DO, PPL-301-DO, PPL-302-DO, PPL-303- DO, PPL-304-DO, PPL-305-DO & PPL-306-DO). He explained that the seven deep offshore blocks covering an area of approximately 6,700 km2 in water depths of 1,150m to 3,100m were on offer in the bid round and intended to be the first in a series of bid rounds aimed at further development of Nigeria’s prospective petroleum basins.
“The bid rounds are within the context of our enhanced legal and regulatory frameworks, as enshrined in Section 73 of the PIA, that seeks to encourage new investors and investments into the next phase of oil and gas exploration in Nigeria. This pre-bid conference is a clarion call to technically and financially capable local and foreign investors to invest and take advantage of the generous fiscal and regulatory regime in the Nigerian upstream petroleum sector.
“The mini bid round is a market- driven programme expected to outperform the last bid round which was held in April 2007 during which a total of 45 blocks were put on offer under a different regulatory regime (the Petroleum Act, 1969). In line with the provisions of the PIA, the Mini Bid Round will be managed by the NUPRC with support from its National Data Repository (NDR) and multiclient partners underpinned by high-quality datasets. The blocks on offer have extensive 2D and 3D seismic data coverage, including multi-beam and analogue data.
Additionally, a 3D MegaSurvey- Plus reprocessed Pre-stack Time Migration of remarkable quality is also available to prospective bidders,” he said.
Exercise to last 4 months
The exercise is scheduled to last for approximately four months along the following processes: Registration & Pre-Qualification Data Prying/PurchaseTechnical Bid Submission/Presentation Technical Bid Evaluation, and Commercial Bid Conference, according to the NUPRC boss.
He said: “Please be rest assured that the entire bid process pursuant to the provisions of the PIA 2021 and attendant regulations will be fair, transparent, and competitive in line with best practices. Furthermore, the mini-bid exercise has been designed to attract competent investors from across the world, both local and foreign, that have the capability and competence in operating in a deep water environment.
However, all awardees must be duly registered in Nigeria under the Companies and Allied Matters Act (CAMA). The applicant may participate either as an individual company or as a consortium.”
More benefits of the exercise
Komolade said the Mini Bid Round is expected to be a huge success for Nigeria and is a big step towards growing the nation’s oil and gas reserves through aggressive exploration and development efforts, boosting production, expanding opportunities for gas utilisation and development, strengthening energy security and economy, providing the opportunity to gainfully engage the pool of competent companies in the oil & gas sector resulting in employment opportunities, enabling the transfer of technology, valorizing petroleum assets in the Nigerian Territory and attracting investments.
“In addition, the Mini Bid Round presents us with the opportunity to reinforce Nigeria’s commitment to openness and transparency in line with the principles of the Extractive Industry Transparency Initiative (EITI).
“On the global scale, the Licensing Round will no doubt be gainful to all stakeholders and will in the long run contribute to long-term global energy sufficiency. Interestingly, the icensing round process was formulated in cognisance of global sustainability goals.
The process will, in addition to technical and commercial considerations, pay the requisite attention to strategies, processes and implementable plans consistent with net zero carbon emission targets, eliminating gas flares as well as overall Environmental, Social and Governance (ESG) considerations.
Komolafe said the recent increase in the price of energy, mostly occasioned by the conflict between Russia and Ukraine and the ensuing energy disruption had reawakened the call for geopolitical energy security and sustainability. He called on investors from across the world with the capability and experience in operating in deep water environments to embrace the generous fiscal provisions of the PIA and join us in the journey of energy sustainability aimed at developing our oil and gas resources as cleanly as possible. Minister’s call The Minister of State for Petroleum Resources, Chief Timipre Sylva, said: “As we move forward with the exploration and production of these seven oil and gas blocks offshore in the deep waters of Nigeria, we are committed to ensuring that these activities are done in an environmentally responsible manner. “We understand the challenges and complexities that come with deep water exploration and production, and we are committed to creating a transparent and fair bidding process for these blocks, which is why we organised the pre-bid conference to answer all the questions you might have.
“We have established a robust set of regulations and guidelines to ensure that the process is fair and competitive. In addition, we have set up a dedicated team to provide assistance and support to all bidders throughout the process. “We believe that the exploration and production of these blocks will bring significant economic benefits to Nigeria, including job creation and increased revenue for the government.” Last line The minister also said the pre-bid conference marked yet another significant milestone in the collective quest as a nation to ensure energy security and access for its people.
“From North to South, East to West, our country is replete with rich hydrocarbon resources, which the administration of President Muhammadu Buhari and Ministry of Petroleum Resources are committed to finding and developing to end energy poverty, create shared prosperity and enthrone sustainable development. “At the heart of this administration is the vision to drive infrastructure and industrial development of the country in order to prosper her citizens and make life more meaningful to all.
This is the motivation that sustained the quest to reform the petroleum sector, which culminated in the passage and signing into Law by Mr President of the landmark Petroleum Industry Act in 2021,” he said.
