Nigeria has announced plans to auction seven deep offshore oil blocks. Nigerian Upstream Petroleum Regulatory Commission, Chief Executive Officer Gbenga Komolafe confirmed the report and said by November, intention to conduct a transparent bidding rounds will be announced.
The bidding is taking place 15 years since the last ones were auctioned. The government issued dozens of such permits between 1993 and 2007 to open up the ocean floor to oil and gas production.
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Site benefits
The oil blocks, located off the city of Lagos in southwestern Nigeria, are between 1,200 meters (3,936 feet) and 3,100 meters in depth. According to Komolafe this location is an advantage due to its proximity to the export free zone in Lagos as compared to the norm location of Niger Delta.
Nigeria’s oil output was at the lowest since 1990 as its crude oil production fell below 1 million barrels per day (bpd) in August 2022. And data from the Organisation of the Petroleum Exporting Countries in early September showed that Angola and Libya have overtaken Nigeria as Africa’s highest crude oil producers. The government blames rampant crude theft on the pipelines that crisscross the Niger Delta for shutting down wells and killing off investment.
In recent years, deep-water production led by international companies such as Shell Plc and TotalEnergies SE has accounted for about 35% of oil output but its share has risen this year as onshore operators have struggled. In addition to granting new licenses, the government is encouraging current block-holders to develop more of their offshore acreage.
