Daily News  :: West Africa

Bid for Nigerian oil blocks set for next month

Published: 11-JAN-07

LAGOS - Bid for the sale of Nigeria's offshore oil blocs, suspended several times last year, has tentatively been fixed for around the middle of February, Energy Minister Edmund Daukoru said on Wednesday.

"The bid round will come up at about the middle of February. This is however tentative," he told AFP after a cabinet meeting.

"There are one or two things we are putting together ahead of the bid round. It is still premature to say the exact number of bloc" to be put on sale´┐Ż, he said, adding that a committee was working on the issue.

The Nigerian government last December suspended until 2007 the sale of around 60 crude oil blocs, initially anticipated for the last quarter of last year, officials from the Department of Petroleum Resources (DPR) said.

Industry sources had last month predicted that the bidding round might take place in February.

The DPR director, Tony Chukwueke, had in October told journalists that the government was increasing the number of blocs up for tender to 60 from 50 previously, owing to increased interest by Asian investors, they said.

"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 had 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 $500mn from the bloc bid round, he also said.

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.

Some 37 Nigerian troops and dozens of Nigerian oil workers were killed by separatist militants in the delta last year while more than 60 foreigners, mostly oil workers, were kidnapped.

Nigeria, which derives more than 95 percent of its foreign exchange revenue from oil and is Africa's largest producer, lost more than half a million barrels a day last year due to unrest by those who want to see more of the earnings put back into the local communities.

According to the country's Finance Minister Nenadi Usman, 570bn naira ($4.4bn) in revenue was lost to unrest last year.

"Early in the second quarter of 2006, there was a loss of production of 600,000 barrels per day from the joint venture operations," Usman said this week.

"The loss was due principally to social disruptions in the Niger Delta which continued until the end of fiscal year 2006," she added.


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