Nigeria government has concluded plans to offer for sales seven fresh deep offshore oil block licences in November, 2022.
According to the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Chief Executive, Gbenga Komolafe, the oil blocks available are at depths of between about 1,200 meters (3,936 feet) and 3,100 metres offshore Lagos.
This last time the federal government issued dozens of such permits was between 1993 and 2007, and it was meant to open up the ocean floor to oil and gas production.
Lagos, Nigeria’s commercial heartbeat, took its place on the table in 2016 when it was officially declared an oil-producing state in Nigeria, following the discovery of crude oil in OML 113 by Yinka Folawiyo Petroleum Company Limited in Badagry, Lagos
According to Komolafe, the oil blocks are located off the city of Lagos, rather than off the coast of the Niger Delta further to the east where most of the country’s oil industry is concentrated, he said.
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The decision to put up the assets for sale is coming months after the NUPRC concluded the disposal of 57 marginal fields after a long and winding process to ramp up the country’s struggling oil production efforts.
Nigeria’s oil output fell to a multi-decade low of fewer than 1.2 million barrels per day in September and has almost halved since the first quarter of 2020.
The government blames rampant crude theft on the pipelines that crisscross the Niger Delta for shutting down wells and killing off investment.
In recent years, deep-water production led by international companies such as Shell Plc and TotalEnergies SE has accounted for about 35 per cent of oil output but its share has risen this year as onshore operators have struggled.
In addition to granting new licenses, the government is encouraging current block-holders to develop more of their offshore acreage.
Earlier this month, the NUPRC also resumed a separate bidding round for firms interested in commercialising gas that is burned off – or “flared” – by oil producers.
While Nigeria possesses Africa’s largest proven gas reserves, over 208 TCF, most of it is untapped, flared or re-injected into oil wells currently.