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Nigeria Ready to Sell 10 Oil, Gas Blocs in Initial Offer

Posted on: Thursday, 23 March 2006, 15:00 CST

Text of report by Hector Igbikiowubo entitled "10 oil blocs for sale" published by Nigerian newspaper Vanguard website on 23 March

Lagos: The federal government has put 10 oil and gas blocs on offer in a mini licensing round for downstream investors committed to spending not less than 2bn US dollars (about 258bn naira) on either the construction of a refinery, power plant, gas pipeline or railroad project, while assuring that a larger licensing round would be conducted before the close of the year.

Shedding light on plans for the 2006 bid round yesterday in Lagos, director-general of the Department of Petroleum Resources (DPR), Mr Tony Chukwueke, said the development was a consolidation of government in the main round.

"But it is mini because it is limited in size. The government wants to meet its obligation to all the major downstream players that have committed a lot of money to downstream oil and gas, necessary to meet the aspiration that the president has already articulated.

"Investors who are willing to or have committed over 2bn US dollars, either building refineries or building power stations or gas pipelines for gas consumption or railroad project or even agriculture, the fuel replacement project to put ethanol in our energy mix would be the main beneficiaries. But they must be substantial downstream investors. Those are the ones that will participate," he said.

Contrary to fears that the licensing round may be a discretionary exercise, Chukwueke said since the process would be opened up to those willing to invest in the country, it could not be termed a discretionary exercise. "We are not going to allow everybody to run around and go through the same issues that have been identified as drawback in the old round we did in 2005. We are going to limit it to really serious downstream players, who are committed to put a lot of money into our downstream sector," he said.

He recalled that three of the oil blocs earlier deployed in the 2005 bid round but were not taken up would be re-introduced in this mini round. These are blocs 289, 471 and 281.

Source: BBC Monitoring Africa

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