Nigeria needs to make the bidding process transparent, ensure that credible investors with a verifiable track record are involved in the process and facilitate the regulatory process, analysts said.

“To avoid the challenges that have plagued bidding rounds in the past, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) should pay special attention to transparency in the bidding process,” said Ayodele Oni, practice group partner. Bloomfield LP Power Company.

Oni said that transparency in the award process and the selection of awardees primarily on the basis of merit and a strict implementation and follow-up of awardees at the end of the award process to ensure that the intent behind the process does not fade will improve the awards. chances of success. .

International oil companies (IOCs), including Shell, Chevron and ExxonMobil, are in the process of divesting themselves of their interests in Nigerian onshore and shallow-water fields.

Oni said: “While this COI exit may not have a direct impact on the mini-bid round, it would ultimately affect how seriously stakeholders and NURPC take the process.

“This round of offers offers relevant parties the opportunities to enhance Nigeria’s production capacity, and at this time, when Nigeria is struggling with its crude oil production, all opportunities should be taken very seriously.”

Olufola Wusu, partner and head of oil and gas at Megathos Law Practice, said that if the process is done correctly, it could increase government revenue and create jobs.

A licensing round is an open invitation by a government to foreign and local oil and gas companies to bid and receive authorization to drill and explore that country’s surface oil and gas. The NUPRC has given repeated assurances of transparency and must abide by it, Wusu said.

“With the need to replace Russian gas supplies and increasing global energy demand leading to an interest in natural gas from Africa, I consider the chances of success quite high,” he said.

According to him, the challenges that successful bidders/winners may face include increased cost of financing, increased scrutiny of environmental issues, a technological limitation creating the need to rely heavily on foreign technical partners, litigation with partners due to an inadequate deal structure and an inadequate understanding of the financial requirements and technicalities of deep offshore drilling for oil and gas.

Etulan Adu, an oil and gas production engineer, described the bidding round as a good step in the right direction if only investors with the right skills and financing get the blocks and not some politically influenced companies that would become another corruption scandal in the future.

“We need independent oil companies pushing these blocks first for oil and gas within a decade. Offshore blocks provide production and export stability. Our daily crude production will increase and generate more revenue for the economy,” Adu said.

Previous oil deals have seen the government generate some money from signing bonus payments, but some of the investors failed to make the investments required to develop the fields.

“The real deal is investing in these blocks for production if they are economically viable. Most of the time, these blocks end up with some companies that, in the long run, will not be able to farm to bring in oil and gas first,” Adu said.

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Some oil operators are calling on the government to start actively courting independent producers in the wake of the exodus of IOCs from the Niger Delta.

Uduimo Itsueli, Chairman of Dubri Oil Company Limited, in a recent interview, told BusinessDay that the future of the Nigerian oil industry would be dominated by independents, whether Nigerian or foreign, because the IOCs would not return.

“The independents do not have the influence of the COIs. Therefore, we need to develop policies that can encourage them. We have to change the way we do business. We need to encourage them, grow our own independents. And attract foreigners quickly”, he had said.

Making the bidding process credible will be a first step in ensuring this outcome. Jide Pratt, Aiona’s COO and Trade Grid country manager, said this is important, considering that investment appetite in Nigeria’s oil sector is low, due to the country’s poor fiscal and regulatory framework and global estrangement. of fossil fuels.

Pratt said funding will be critical. “Maybe it’s time to seek funding from Saudi Arabia and other nations outside of Europe, as well as lean on the Nigerian Exchange Limited to sensitize investors to investments like oil blocks,” he said.