Nigeria offers 7 oil blocks in offshore licensing round

Nigeria is offering seven offshore oil blocks, in its first non-marginal upstream licensing round for 15 years as it attempts to increase production.

Upstream regulator NUPRC said the blocks are in water depths of 1,150m to 3,100m in the Benin basin offshore Lagos, which is further west than most of the country's producing fields, and this will be "the first in a series of bid rounds, aimed at further development of this prospective petroleum basin."

The basin forms the easternmost part of the west African equatorial transform margin, which stretches through the waters of Benin, Togo, Ghana, Ivory Coast, Liberia and Sierra Leone. Italy's Eni has found 2.5bn bl of oil at the Baleine field, offshore Ivory Coast. London-listed Tullow Oil has been producing in the region from the Jubilee field, offshore Ghana, since 2010.

Norwegian geophysical company PGS and the Nigerian Department of Petroleum Resources, predecessor to the NUPRC, said "petroleum systems are proved to be working through the presence of the Aje field to the north, and the Hihon and Fifa discoveries to the west, in Benin."

This will be Nigeria's first licensing round since the Petroleum Industry Act (PIA) passed into law in 2021 and the first since the offer of 45 oil blocks in April 2007 if marginal field licensing is discounted. The country's upstream sector has been afflicted by a lack of investment, the exit of some international firms and ongoing infrastructure and security problems, which combined to push production to record lows earlier in 2022.

In the short term, Nigeria's state-owned NNPC expects production to rebound to 1.8mn b/d by the end of the year and to increase further in 2023. Beyond that, NUPRC chief executive Gbenga Komolafe told Argus: "We need to beef up Nigeria's production."

"We have promised that there will be a predictable upstream regulatory environment," Komolafe said. "We will ensure that there is clarity about everything, to prevent the kind of situation with ExxonMobil and Seplat," referring to a stalled purchase by the London-listed firm of the US major's shallow-water producing assets in Nigeria.

NUPRC has set a 31 January deadline for submissions of interest in this bidding round, and it will hold a conference with potential bidders on 16 January.

By Adebiyi Olusolape