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Nigeria's New Oil Licensing Aims to Boost Output

Nigeria is making significant strides in the oil industry by offering 12 new oil blocks in its 2024 licensing round, alongside reinitiating a stalled round for seven blocks from 2022.

This ambitious move, overseen by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), aims to attract international investors with the capability to immediately commence exploration activities, according to Argus. 

The 12 blocks on offer are strategically selected to appeal to investors with the necessary financial and technical prowess, according to NUPRC chief executive Gbenga Komolafe.

These blocks, ensuring a variety of opportunities for potential investors, are distributed across diverse geological settings, including:

Two on land in the Niger Delta

Six on the continental shelf

Four in deep water

This geographical spread not only enhances the appeal of the blocks but also reflects the varied exploration potentials across Nigeria.

Providing essential data for this round, Norwegian company PGS is supplying seismic information that will be crucial for bidders assessing the blocks.

The licensing process is set to span nine months, culminating in January 2025 with necessary ministerial consents and procurement procedures.

In a bid to foster investment and ensure commercial viability, Komolafe announced competitive entry fees and the end of substantial early signing bonuses, signaling a new era of accessibility and potential profitability for investors.

Additionally, Petroleum Minister Heineken Lokpobiri emphasized the commitment to stringent deadlines for selected bidders, ensuring that only those ready for rapid exploration will be involved.

Moreover, Lokpobiri disclosed plans to concurrently license seven offshore blocks from the 2022 round, stressing that all 19 blocks are reserved strictly for capable investors. 

This decision reflects the government's strategy under President Bola Tinubu’s administration, which aims to increase Nigeria’s crude oil production to 2.6 million barrels per day by 2027, a significant rise from the current OPEC+ target of 1.5 million barrels per day.

This global outreach underscores Nigeria's commitment to expanding its oil production capabilities and attracting global investment.

This new licensing round represents a critical step for Nigeria in bolstering its position as a leading oil producer and ensuring the nation meets its future production targets while fostering a competitive and transparent investment environment.

Nigeria is making significant strides in the oil industry
Nigeria is making significant strides in the oil industry

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