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Nigeria Oil Blocks Winners Get Deadline to Pay Up

Posted on: Thursday, 20 October 2005, 09:00 CDT

Nigeria oil blocks winners get deadline to pay up

LAGOS, Oct. 19 (Xinhua) -- Nigeria has granted oil blocks winners in the 2005 bidding round two months grace period ending December 15 to get the signature bonus, local media reported Wednesday.

So far, only 1.2 billion US dollars has been paid by winners of the 44 oil blocks awarded, representing 50 percent of the expected revenue of 2.6 billion dollars.

Tony Chukwueke, head of the Department of Petroleum Resources, listed at an industry conference Tuesday India's ONGC, the Korean National Oil Co. and indigenous oil producer Conoil as some of the firms that had submitted proof of payment.

"Government recognized that bond costs money and that some of the new players in the oil and gas sector required a bit more time to be able to find these bonds," Chukwueke said.

"So we have decided that we will give those who have asked us more time, not to find the fond but to bring the money."

Chukwueke was quoted as saying that all the production sharing agreement for the oil blocks would be signed by the country's oil minister on December 15 and that any company that failed to comply with the directives would have no opportunity again.

Meanwhile, he stated that the government had dropped the idea of first refusal on some specific oil blocks tied to special downstream projects. Major US oil companies had boycotted the 2005 bidding round in August in protest of the government's decision to give certain companies preferential rights over prospective deepwater blocks.

"Because of the huge protest generated by the issue, we decided to withdraw the right of first refusal. Rather, investors who fell they have the money should come round with their money on December 15, to demonstrate their seriousness," Chukwueke added.

Source: Xinhua News Agency - CEIS

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