By Samuel Ibiyemi
The Federal Government has concluded plans to conduct full auction of exploration blocks during the next licensing round slated for the first quarter of 2018.
This is to help the government raise revenue for the country and to meet production targets of 4 million barrels daily and 40 billion oil reserve.
The Minister of State for Petroleum Dr Ibe Kachikwu disclosed to Nigerian NewsDirect in a special interview conducted on the sideline of an international conference that the licensing round had been scheduled for the first quarter as a result of intensive work needed to be completed before the auction would take place. According to him, the intensive preparation for the licensing round was ongoing by the Ministry of Petroleum Resources.
“The licensing round requires a lot of work, we will see what we can do later this year but it will not exceed first quarter of 2018,” he assured.
The former Technical Assistant to Minister of State for Gas and former Commissioner for Energy &Mineral Resources Mr Ajibade Taofeek Tijani said in a telephone interview that the period from today to next year is enough to have credible licensing round. However, he said that investors would not take the government seriously until the Ministry of Petroleum decided to roll out the timetable for the exercise. “The timetable must also include date for road show that will take place in three different locations both in the country and abroad to create awareness for prospective investors that will submit bids for the exploration blocks,” he noted.
Nigeria’s previous oil licensing rounds have suffered integrity deficit as blocks were awarded to predetermined winners who lacked technical and financial competence to put the blocks to use.
It was also reported recently that future licensing round would be outsourced to a foreign consultant to ensure integrity of the exercise.
Industry analysts said the conduct of the oil licensing round was expected to jumpstart activities in the upstream sector of Nigeria’s petroleum industry which has been operating near zero level. They however warned the government to carry out adequate consultation so that explorations billed for auction will not have litigation. “Selection of exploration blocks with clean record will encourage investors to participate in the bid round exercise,” they argued.
However, the analysts identified absence of fiscal terms for the licensing round as a challenge if the National Assembly failed to pass the Petroleum Industry Bill ( PIB) before the end of this year.
Early this year, the Federal Government had announced plans to conduct bid round for marginal fields in the oil and gas industry.
The last open licensing round was conducted towards the exit of former President Olusegun Obasanjo’s administration in May 2007.