Nigeria rakes in $482 mln from 57 marginal oilfield licences

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ABUJA, June 28 (Reuters) – Nigeria has raised more than 200 billion naira ($482 million) from the issuance of oil prospecting licences after it offered 57 fields for bidding, the petroleum regulator said on Tuesday.

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) said over 70% of the awardees have fully paid for their licences, two years after bids were sought for the oil blocks. It did not say how many licences were issued. read more

Marginal fields are smaller oil blocks located onshore or in shallow waters and are typically developed by local companies.

The NUPRC, which was established last year after Nigeria passed a new petroleum law, said 30 oil fields were awarded between 1999 to 2010, with 17 producing. The latest round of 57 oilfields began in 2020.

Nigeria, Africa’s biggest oil producer and exporter, wants to boost production from the fields to bolster state finances and increase local participation in the oil sector, which provides the bulk of the country’s foreign exchange.

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While local companies have become increasingly important to the industry, it remains dominated by international oil majors that are selling onshore assets to focus on deep-water drilling.

Nigeria’s oil minister said on Friday that after meeting with oil companies he expects to see some improvement in security in the sector that will enable Africa’s top producer to meet its OPEC production quota by the end of August.

Nigeria loses millions of barrels of crude oil a year because of theft and vandalism, underscoring how insecurity causes vast financial losses for the West African country. The President has pledged to ensure that oil theft is stopped and has set up dedicated courts to combat the problem.

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This year, the government budgeted 1.8 million barrels per day of production. However, production hit 1.5 million bpd in the first quarter, a shortfall that the government blamed on attacks on oil infrastructure and crude theft.

“For us in Nigeria we are at a low point. We are not able to meet our OPEC quota,” Oil Minister Timipre Sylva told a media conference, but added he expected to do so soon.

“We have given ourselves just about a month to ensure that we can … we believe that by August we would see some improvement in security,” he said.

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“At this moment, I think prices are firm enough and I don’t think there will be any surprise in August. We believe that the market is well supplied,” he said.

“Of course some people consider price to be on the high side and expect us to pump more. At this moment there is little capacity that can be brought to the market.”

Sylva also said Nigeria had started construction of a 614 km (382 mile) gas pipeline which will reach Europe through Algeria.

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Earlier this week, Algeria, Niger and Nigeria held talks this week on the revival of a decades-old project to pipe gas across the Sahara, a potential opportunity for Europe to diversify its gas sources.

Sylva said Nigeria was now embarking on construction of its portion of the gas pipeline.

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($1 = 414.6400 naira)

Reporting by Camillus Eboh; Writing by Chijioke Ohuocha; Editing by Richard Pullin