2024 oil bid round are for individuals with proven financial capacity, technical competence – Minister

. As NUPRC pledges to conduct fair, transparent bids

As part of effort to drive investment and boost the nations economic fortunes, the Minister of State for Petroleum Resources (Oil), Sen Heineken Lokpobiri, says the 17 oil blocs put forward for sale under the 2024 licensing bid round are not for politicians, but investors with financial capacity and technical competence.

Lokpobiri disclosed this during a conference organised by the Petroleum Technology Association of Nigeria (PETAN), at the ongoing 2024 Offshore Technology Conference (OTC), in Houston, Texas U.S

The conference has the theme “Sustainable Energy Solutions for Africa’s Future (Nigerian Perspective).

He said in the past the award of oil blocs culminated to the non-development of over 90 per cent of marginal fields.

This, he said, denied the Federal Government of reaping the intended benefits because such awards were not based on technical and financial considerations.

“We have noticed a lot of idle blocs and little or no investment done on them in the last three years of acquiring them.

“I can tell you for fact that over 90 per cent of owners of these oil blocs are seeking for renewal without commencing or investing on them.

“In this regard, we are saying no more to that, and hence, those seeking for blocs must be financially and technically capable to turn it around and not mere portfolio investors.

“These set of investors are those we consider as men and not boys in the industry.

“The blocs are not for politicians. So, we are downplaying that kind of investors in this new bid rounds.

“However, we have taken away the 200 million signature bonus tied to blocs ownership.

“What we have tried to achieve is to tie such to operations and investment which will encourage investors and drive investment speedily on a field.

“I have worked closely with the NUPRC to ensure that we achieve a seamless transition and bid round sales this year,” Lokpobiri said.

Similarly, the Commission Chief Executive, Nigerian Upstream Petroleum Regulatory Commission, (NUPRC), Mr Gbenga Komolafe, said the recent Presidential Executive Orders issued in March were aimed at improving the efficiency and attractiveness of Nigeria’s oil and gas sector.

Komolafe said that it would culminate in further increasing the nation’s oil and gas reserves, currently standing at 37.5 billion barrels of crude oil and condensate reserves and 209.26 trillion cubic feet of natural gas reserves.

“The exercise, which was initially announced on the 29th of April 2024, is a significant leap in our strategic hydrocarbons development initiative.

“This round introduces twelve meticulously selected blocs across diverse geological spectra — from the fertile onshore basins to the promising continental shelves and the untapped depths of our deep offshore territories.

“Each bloc has been chosen for its potential to bolster our national reserves and stimulate economic vitality.

“Our approach is underpinned by the robust legal framework of the Petroleum Industry Act 2021(PIA), which ensures compliance with best practices to boost investors’ confidence.

“In keeping with the provisions of the PIA and regulations made under the Act, the Commission has issued a licensing round guideline and published a licensing round plan for the twelve blocs.

“Namely PPL 300-CS; PPL 301-CS; PPL 3008; PPL 3009; PPL 2001; PPL 2002; PML 51; PPL 267; PPL 268; PPL 269; PPL 270; and PPL 271).

“In addition to these blocs, the seven deep offshore blocs from the 2022 Mini-Bid Round Exercise which cover an area of approximately 6,700 km2 in water depths of 1,150m to 3,100m shall also be concluded along with this Licensing round.

“To ensure the seamlessness of the licensing round exercise, the NUPRC, in collaboration with our national data repository and multi-client partners.

“Guarantees access to comprehensive and high-quality geological data, facilitating informed decision-making and strategic investments,” he said.

He said that the blocs on offer have extensive 2D and 3D seismic data coverage, including multi-beam and analogue data.

“Additionally, a 3D reprocessed Pre-stack Time Migration of remarkable quality is also available to prospective bidders.

“The availability of advanced seismic datasets and analytical tools via our dedicated portals exemplifies our commitment to excellence and technological advancement.

“Distinguished investors and industry captains and stakeholders, the licencing round is indeed expected to be a huge success for Nigeria and is a big step toward growing the nation’s oil and gas reserves through aggressive exploration and development efforts.

“Boosting production, expanding opportunities for gas utilisation and end-to- end development across the value chain, strengthening energy security and economy.

“Providing occasion to gainfully engage the pool of competent companies in the oil and gas sector with multiplier effect in employment opportunities.

“Enabling transfer of technology, valorising petroleum assets in the Nigerian territory and attracting investments.

“In addition, the licencing 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 beneficial to all stakeholders and will in the long run contribute to long-term global energy sufficiency.

“Interestingly, the licensing round process was formulated in cognisance of global energy sustainability goals,” he added.

NUPRC has begun a road walk in Houston, for oil bidders and will be in Miami florida next week

Seplat Energy Plc has announced its drilling program for 2024 with plans to deliver 13 new oil and gas wells across its operated and non-operated assets.

The company disclosed this in its unaudited results for the first quarter ending March 31, 2024.

“The breakdown of the new wells includes 11 dedicated to oil production and two focused on gas production,” it said.

The company stated that its drilling programme delivered one well from the 2024 drilling programme, Ovhor21, in the first quarter of 2024.

It added that it completed two wells; Okporhuru-9, and Sapele-37, which were spudded towards the end of 2023.

“Sapele-37 and Okporhuru-9 had multiple targets in their respective initial plans, and each recorded notable positive results. Each well had secondary exploration targets in previously untested deeper stratigraphy in OML 41.

“We are pleased to announce the discovery of hydrocarbons, predominantly gas, in both wells. Okporhuru -9 well discovered multiple hydrocarbon-bearing intervals in deeper formations,” the company stated.

“The Sapele-37 well, previously known as Sapele-N, discovered hydrocarbons in deeper reservoirs. Additionally, it has confirmed the extension of the Sapele field to the north. Initial findings indicate that these deeper reservoirs could be commercially viable,” the energy company announced.

It added that further technical analysis is currently being conducted to evaluate the potential of Okporhuru, Sapele, and the broader OML41 area at greater depths.

“For the remainder of 2024, we plan to deliver the remaining 12 wells on the 2024 drilling plan. Three wells: Ovhor-22, Sapele-38, and OBEN KIKB-02, are expected to be completed during the second quarter. We expect these wells to support production volumes later in the year,” the company maintained.

According to the Chief Executive Officer, at Seplat Energy, Roger Brown, an executive order has been signed and officially implemented as law, which could significantly enhance Seplat’s contracting procedures and bring about improved efficiency that will contribute to cost reductions.

Seplat Energy Plc has also announced N1,309.88 per $1 as the exchange rate for determining the final and special dividend payout to eligible shareholders who choose to receive their dividends in naira.

Brown said the company has discovered hydrocarbons in deeper reservoirs than had previously been tested at Sapele-37 and Okhorpuru-9.

Nigeria reportedly lost N340.87 billion to gas flaring in the first quarter of 2024, as oil and gas firms operating in the country’s oil and gas sector flared 83.9 billion standard cubic feet (BSCF) of gas in three months (January and March 2024), according to latest data released by the National Oil Spill Detection and Response Agency (NOSDRA).

In its report for the period, NOSDRA noted that the amount lost to gas flaring was 10 percent higher than the $266.9 million, about N309.871 billion, lost in 2023.

According to the environmental watchdog, the volume of gas flared in the first quarter of 2024 emitted 4.5 million tonnes of carbon dioxide into the atmosphere and was capable of generating 8,400 gigawatts hour of electricity, while the offending companies were liable for the payment of fines totalling $167.7 million, an equivalent of N194.699 billion.

In comparison, NOSDRA noted that between January and March 2023, the oil firms flared 76.3 billion SCF of gas, which was valued at $266.9 million (N309.871 billion); was capable of generating 7,600 gigawatts-hour (GwH)of electricity; contributed 4.1 million tonnes of carbon dioxide emission, with the firms liable for penalties of $152.5 million, an equivalent of N177.053 billion.

This was even as power generation is expected to increase by 500 megawatts (MW) in the second quarter of 2024, driven by new power plants and rehabilitated facilities.

Specifically, thermal power generation is expected to remain dominant, but renewable energy sources like solar and wind are expected to gain traction; while transmission and distribution constraints are expected to persist, affecting power availability and reliability.

Furthermore, giving a breakdown of gas flared by production segment, the environmental regulatory agency stated that oil and gas firms operating in the country’s onshore oil space flared 42.5 billion SCF of gas in the first three months of 2024, accounting for 50.72 percent of total gas flared.

NOSDRA added that the gas flared onshore was valued at $148.9 million, about N172.873 billion, with penalties payable of $85.1 million, an equivalent of N98.8 billion; while it contributed 2.3 million tonnes of carbon dioxide to the atmosphere and had the potential to generate 4,300 GwH of electricity.

In the same period in 2023, companies operating onshore, caused the country a loss of $130 million (N150.93 billion), from the flaring of 37.1 billion SCF of gas, which has power generating potential of 3,700 GwH and contributed two million tonnes of carbon dioxide emissions, while penalties payable by the companies stood at $74.3 million (N86.262 billion).

On the other hand, companies operating offshore flared gas valued at $144.7 million, accounting for 49.28 per cent of total gas flared in the first three months of 2024.

Specifically, the companies flared 41.3 billion SCF of gas; 5.63 percent higher than the 39.1 billion SCF flared in the same period in 2023; while the quantity flared elicited penalties of $82.7 million, carbon dioxide emission of 2.2 million tonnes and had power generation potential of 4,100 GwH.

Comparatively, in the same period in 2023, offshore companies flared 39.1 billion SCF of gas valued at $136.9 million, with power generation potential of 3,900; carbon dioxide emission of 2.1 million tonnes and penalties payable of $78.2 million.

Some of the offending companies, according to NOSDRA include Shell Petroleum, Development Company (SPDC), Nigerian Petroleum Development Company (NPDC), Chevron Nigeria, Mobil Oil, Elf Petroleum Nigeria, Nigeria Agip Oil Company (NAOC), Addax Petroleum, Texaco Overseas (Nigeria), Esso Exploration and Production Nigeria, Allied Energy Resources, Ultramar Petroleum, Atlas Petroleum; Cromwell and South Atlantic Petroleum, among others.

These companies flared gas from Oil Mining Leases (OML) 04, 05, 11, 13, 14, 17, 18, 22, 28, 23, 24, 38, 40, 42, 43, 72, 49, 54, 90, 95, 67, 70, 104, 59, 99, 100, 101, 102 and Oil Prospecting Licences 222, 3.