NewsWest AfricaNigeria to open bidding for 31 marginal oil fields next month

Fri,25Jul2014

Posted on Friday, 29 November 2013 05:47

Nigeria to open bidding for 31 marginal oil fields next month

By REUTERS

Photo©ReutersNigeria will open a bidding round for 31 marginal oil fields to indigenous Nigerian companies next month, the oil minister said on Thursday.

The competitive bidding process for fields that are too small to be of interest to oil majors is expected to take four months in total, Oil Minister Diezani Alison-Madueke said in a statement.

Government encourages companies where possible to bid in consortia

She gave no estimate of the reserves involved. Sixteen of the fields are located onshore and 15 are in shallow water, Alison-Madueke said.

"This exercise is geared towards opening up the oil and gas sector ... to a wider participation, with a view to creating a robust and virile industry," she said.

Nigeria is Africa's biggest oil producer, exporting around 2 million barrels per day (bpd), and also holds the world's ninth largest gas reserves, which are largely untapped.

The OPEC member's light, sweet crude is popular with U.S. and Asian buyers, although the U.S. shale boom has cut demand.

Oil majors say uncertainty over changes in regulation in a proposed oil bill, which has been stuck in parliament since last year, and insecurity in the onshore Niger Delta are holding back new foreign investment.

Meanwhile, smaller domestic players are queuing up to buy assets from oil majors, which are shifting away from small and medium-sized onshore fields to larger offshore investments where they don't have to deal with oil theft or sometimes fraught community relations.

The sale of the licences is going ahead despite the fact that the national assembly has still not passed the Petroleum Industry Bill, which will adjust the terms on these types of contracts.

Alison-Madueke has said in the past that Nigeria should not let the bill hold up license bids or renewals.

"Government encourages companies where possible to bid in consortia to enable the parties to leverage upon each other's strengths," she said in Thursday's statement.

The last round of sales of marginal fields in 2003 left 24 fields in the hands of 31 local companies, which have since discovered more than 100 million barrels of oil and have contributed 1 percent to national output, she said.



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