2024 Oil bid round: A new dawn for Nigeria’s oil and gas sector
By Yunus Yusuf
The just concluded 2024 oil licensing bid round marks a significant milestone for Nigeria’s oil and gas industry.
The event represents a major step toward revitalising the sector, attracting foreign investment, and bolstering energy security.
This followed the award of oil exploration and production licences to 25 successful bidders by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).
The award signals a renewed hope for the country’s upstream oil industry.
This development is a pivotal moment for Nigeria as it seeks to optimise its vast hydrocarbon resources.
The awarded blocks, spread across onshore and offshore regions, are expected to trigger significant exploration and production activities in the coming years.
They are also expected to unlock billions of dollars in investment and potentially increasing Nigeria’s oil reserves and boosting production capacity.
The oil and gas sector remains a key pillar of the Nigerian economy, contributing significantly to GDP and government revenues.
These licences are expected to unlock billions of dollars in investment and enhance Nigeria’s oil reserves, contributing to economic growth and stability in a sector that accounts for a substantial portion of the nation’s GDP and government revenues.
The 25 winners include a mix of international majors and indigenous players, reflecting the government’s ongoing efforts to encourage local participation in the sector while maintaining strategic relationships with foreign investors.
The winners that emerged after a competitive bidding process include Sifax and Royal Gate Consortium, and Oceangate Engineering Oil and Gas Ltd, who won the bids for PPL 300-DO and PPL 302-DO respectively.
Other winners include MRS Oil and Gas Company Ltd, Homeland Integrated Offshore Services Ltd, Hamilcar Oil and Gas Consortium, and BISWAL Oil and Gas Ltd. Petroli Energy Marketing and Supply Ltd won the PPL 269, while Sahara Deepwater Resources Ltd won PPL 270 and PPL 271.
Totalenergies emerged as the winner in the PPL 2000/2001, beating Star Deepwater Petroleum Ltd.
By awarding 25 oil blocks to a diverse group of winners, the NUPRC has set the stage for a new era of exploration and production activities.
This development is expected to bring fresh investments, create jobs, and enhance the country’s production capacity, while also addressing the challenges of declining output.
As the winners prepare to embark on their exploration journey, Nigeria’s energy future looks brighter, and its oil sector may soon return to its full potential—if the necessary policies and support structures are put in place to guide these new ventures to success.
Mr Gbenga Komolafe, the Commission Chief Executive of NUPRC, noted that: “The bid round is in line with the government’s commitment to transforming the upstream oil sector.”
He expressed his excitement, stating that “this development would bolster Nigeria’s oil production capacity and enhance its competitiveness on the global stage.”
Komolafe also highlighted that “the awards demonstrate the continued global interest in Nigeria’s oil resources despite the global push for renewable energy.”
Furthermore, Komolafe noted that “the successful bidders will help to increase Nigeria’s oil production output, ensuring the country retains its position as one of the leading oil producers in Africa.”
According to him, this will also boost government revenues, which are crucial for national development.
“The future of the Nigerian oil and gas industry must be both prosperous and sustainable.
“We are committed to ensuring that operators align with the country’s environmental policies while also contributing to economic growth,” he said.
Industry experts have also lauded the development, pointing out that the bid round offers an opportunity for the country to reverse the decline in its crude oil output, which has seen a consistent fall in recent years due to ageing fields and a lack of fresh investments.
Mr Mike Osatuyi, former Operational Controller of the Independent Petroleum Marketers Association of Nigeria (IPMAN), said that “the awarding of the 25 oil blocks would create thousands of direct and indirect jobs across the country.
“The new exploration activities will require skilled labour, technical expertise, and support services, all of which will positively impact Nigeria’s economy, especially in regions where the blocks are located.
“In addition, the government anticipates increased revenue generation through taxes, royalties, and dividends from the exploration and production activities of the awarded companies.
“The revenue is expected to be reinvested in critical infrastructure, education, and healthcare, contributing to long-term socio-economic development,” Osatuyi stated.
Similarly, Mr Rabiu Bello, an oil and gas expert, noted that if the winners were industry players with technical and financial capabilities to explore and develop the assets in the shortest possible time, then Nigeria will benefit from increased production and foreign exchange revenues that are needed to stabilise the currency and service foreign debt.
On his part, Alhaji Debo Ahmed, former President of the Independent Petroleum Marketers Association of Nigeria (IPMAN) noted that production had been below capacity.
“Nigeria’s oil production has been hovering around 1.3 million barrels per day (bpd), well below its potential capacity,” he said.
Ahmed stressed the importance of attracting both local and foreign investments.
He noted that, “a mix of indigenous and foreign firms brings the needed capital, technology, and technical expertise required for oil exploration and production.”
Local companies have also hailed the bid round as a sign of growing opportunities in the oil and gas sector, allowing them to demonstrate their capacity in the exploration and production of Nigeria’s rich oil resources.
