adminabuja. — Nigeria will offer domestic operators 31 exploration licences this months for oilfields with volumes too low for bigger overseas companies, broadening the range of investors in the industry.
Sixteen onshore and 15 shallow-water leases of so-called marginal fields will be auctioned, Petroleum Minister Diezani Alison-Madueke said last week.
“Government encourages companies where possible to bid in consortia to enable the parties to leverage upon each other’s strengths,” Ms Alison-Madueke said in Abuja.
There will be three-and-a-half months of bidding, she said.
Output from the fields is too little to be profitable for international companies such as Royal Dutch Shell and Exxon Mobil, which run ventures with state-owned Nigerian National Petroleum Corporation.
Such enterprises, also with Chevron, Total and Eni, pump more than 90 percent of the biggest African producer’s oil.
The plans come a decade after a set of 24 marginal sites were awarded to 31 local producers.
The supply from eight of those now makes up 1 percent of the country’s total, adding 100 million barrels of crude to the nation’s reserves, according to the minister.
Nigeria, oil cartel Opec’s seventh-largest producer, pumped 1,99 million barrels a day in October, according to Bloomberg data.
Increased output by local companies from oil leases bought from international producers have “heightened the appetite for oil blocks”, Dolapo Oni, a Lagos-based energy analyst at Ecobank Research, said.
“A licensing round would be the ideal solution to the level of demand for oil blocks at the moment.
“More importantly, the local banks are better informed about the oil and gas industry and can back the acquisition and development of these fields,” he said.
Nigerian companies “continued to demonstrate remarkable technical ability in operating significantly larger assets” by buying fields from international producers, Ms Alison-Madueke said.
Local producers including Seplat Petroleum Development and Oando are raising their share of the country’s output by agreeing to take fields in restive areas previously operated by global producers such as Shell and Chevron as they retreat.
Shell and Chevron are selling assets that can produce a total of 300 000 barrels of oil a day from nine leases. Stakes in 13 fields were sold by Shell, Total and Eni from 2010, mostly to domestic companies. — Bloomberg.
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