Nigeria assesses license round bids

Thirty-four groups have submitted 51 offers to operate 22 Nigerian blocks in the exploration round announced in March 2000. In an attempt to display transparency, the bids were opened publicly July 5. The permanent secretary of the Nigerian Ministry of Petroleum Resources, Aboki Zhawa, will head a committee to evaluate the bids.


Thirty-four groups submitted 51 offers to operate 22 Nigerian blocks in the exploration round announced in March 2000. In an attempt to display transparency, the bids were opened publicly July 5. The permanent secretary of the Nigerian Ministry of Petroleum Resources Aboki Zhawa will head a committee to evaluate the bids.

Director of the Department Of Petroleum Resources Peter Achebe said bidding is no longer the exclusive realm of multinational oil companies. He also noted that Nigerian states Bayelsa, Rivers, and Akwa Ibom have formed oil companies and submitted tenders for some blocks.

To be eligible to bid, each indigenous company had to provide a copy of a memorandum of understanding between it and foreign technical partners and prove it is worth at least 1 billion naira.

Bidders had to, among other things, provide evidence of technical capabilities, define work program and local content commitments, and promise a monetary pledge to be used for a social project in the host community.

Companies bidding include Texaco Overseas Nigeria Ltd., Chevron Corp., Agip SPA, ExxonMobil Corp., Addax Petroleum Development Nigeria Ltd., Ocean Energy Inc., and TotalFinaElf SA.

In March, the government revoked 31 exploration licenses in an attempt to clean up the oil sector by reclaiming blocks from companies that allegedly had not fulfilled all of the requirements of the lease agreements (OGJ, Mar. 6, 2000, p. 36). Sixteen were revoked in July 1999. Many of these blocks were offered in this newest Nigerian exploration round.

In May, indigenous firm Oil & Gas Nigeria Ltd. brought suit, claiming Nigeria had snatched away its lease and offered it for re-lease even though OGN and partner Texaco Inc. had fulfilled all lease requirements (OGJ Online, May 24, 2000). Other suits were filed as well.

Regarding these suits, government special advisor Funso Kupolokun said only that the government had gone to court to seek the lifting of an order restraining it from reallocating the blocks and that the suits would not deter the current licensing round.

Kupolokun said the new approach of open, competitive bidding would put a halt to the practice in the days of military rule when oil blocks were awarded as patronage to certain parties.

Kupolokun said the next step would be the evaluation of the bids in accordance with the 11 guidelines governing the allocation of license blocks. A second round of bidding conditions will examine bidders' evidence of registration, their financial capability to work on the blocks, technical capabilities, and the premiums they are willing to offer.

Companies that make it through the second round of bidding conditions will be invited to begin detailed discussions.

The winners of the blocks will be made known in the fourth quarter, said Kupolokun.

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