Nigeria Withdraws Five Oil Blocks from 2024 Bid Round Amid Legal Disputes

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As investors begin registration for the 2024 Licensing Round, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has withdrawn five oil blocks due to ongoing legal disputes. The affected blocks are PPL3008, PPL3009, PML51, PPL267, and PPL268.

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Initially, 12 oil blocks were announced by NUPRC Chief Executive Gbenga Komolafe at the Miami International Roadshow for the 2024 licensing round. However, with the removal of the five disputed blocks, the NUPRC plans to increase the number of available assets based on newly acquired data.

“Due to newly acquired data from the Multiclients, the Assets on offer in the ongoing Licensing Round will be increased. However, PPL3008, PPL3009, PML51, PPL267, and PPL268 have been removed from the bid process due to ongoing litigation,” the NUPRC said in a notice.

The commission did not provide details about the litigants or the reasons behind the disputes. It remains unclear if the five withdrawn blocks are part of the 17 blocks currently on offer.

Despite this setback, the NUPRC has added 17 deep offshore blocks to the 2024 Licensing Round, aiming to enhance value from Nigeria’s abundant oil and gas reserves and boost production. The deadline for registration and submission of pre-qualification documents has been extended to July 5, 2024, with data access and bid preparation starting on July 8, 2024, and closing on November 29, 2024.

President Bola Tinubu recently announced a reduction in the signature bonus for successful bidders from $200 million to $10 million to encourage investment. According to Komolafe, this decision was influenced by comparative analysis with other countries like Brazil, where lower signature bonuses have facilitated greater investment.

Deepwater investments will now attract a $10 million signature bonus, while shallow water and onshore investments will require $7 million. Interested bidding organizations must demonstrate financial capacity of about $200 million for deep offshore and $150 million for shallow water and onshore.

The NUPRC remains committed to ensuring a transparent and efficient bidding process to attract further investment in Nigeria’s upstream sector.

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