Daily News  :: West Africa

Nigeria holds back on oil sale

Published: 21-DEC-06

Lagos - The Nigerian government has suspended until 2007 the sale of 60 crude oil blocs, initially anticipated by the end of this year, an official from the Department of Petroleum Resources (DPR) said on Tuesday.

"We do not yet know the new date for the sale of the blocs. The federal government has not taken a decision on the issue. We know it will come up in the new year. The whole issue is at the government's discretion," said the official who requested anonymity.

"The presidency decides on how and when to put oil blocs on sale. All that we do in DPR is to carry out government decision on the issue," he added.

Industry sources said the bidding round might take place in February 2007.

The DPR director, Tony Chukwueke, had in October told journalists that the blocs would be put up for auction before the end of 2006.

He said that the government was increasing the number of blocs up for tender to 60, from the previous number of 50, owing to increased interest by Asian investors.

"We have had a flood of investors from Asia who are interested in our downstream sector, in so far as we give them opportunity in the upstream and this is forcing us to increase the number of blocs on tender ... from 50 blocs initially announced to 60," Chukwueke said.

He said that the new government policy gives preference to companies that agree to invest in the downstream sector of the industry.

Nigeria, which derives more than 95 percent of its foreign exchange earnings from oil, hopes to realise about 500 million dollars from the bloc bid round, he stated.

The country normally produces about 2.6 million barrels of oil per day but a quarter of this has been affected in the past months due to restiveness in the oil-rich Niger Delta.

Meanwhile, Chukwueke who was suspended from office last month pending the result of an investigation into the sale of bloc OPL 291, has been reinstated, an official said.

"He (Chukwueke) is back in his office. He resumed work last week," said the official, who declined to give further details on the circumstances surrounding the DPR boss's return.Sapa-AFP

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