TotalEnergies, MRS, and Others Win Oil Blocks in FG’s First Commercial Bid Round

The Federal Government has successfully concluded its first oil bid round under the Petroleum Industry Act (PIA) 2021, with several indigenous oil and gas companies securing Petroleum Prospecting Licences (PPLs).

These licenses grant the rights to explore, develop, and produce hydrocarbons from both onshore and deep offshore oil blocks.

The event, which took place during the 2022/2023 Mini Bid Round and the 2024 Licensing Round, saw strong participation from Nigerian companies such as TotalEnergies, Sifax, MRS, Applefield, FIRST E&P, and Sahara Deepwater.

Out of the 31 blocks offered by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), 25 attracted bids, while six blocks failed to generate interest.

The bid round, held in Lagos on Wednesday, marked a significant step toward increasing local participation in Nigeria’s oil and gas sector. Indigenous companies, benefiting from enhanced technical and financial capabilities, emerged dominant, securing key blocks expected to boost domestic energy production.

Interestingly, the Nigerian National Petroleum Company Limited (NNPC), despite qualifying to bid for several blocks, failed to secure any, losing out to competitors like MRS and others.

The NUPRC also revealed plans for another licensing round in 2025, reaffirming its commitment to fostering a competitive and transparent environment in the upstream oil sector. The regulator also emphasized the “Drill or Drop” provision under the PIA, which mandates that idle blocks be reclaimed and re-auctioned to ensure efficient resource utilization.

Shell’s $2.4 Billion Asset Sale to Renaissance Consortium Approved

In a related development, the federal government officially approved the $2.4 billion sale of Shell’s onshore and shallow-water assets to Renaissance Consortium. This transaction, initially announced by Shell on January 16, 2023, involves a consortium of four Nigerian exploration and production firms and an international energy group.

The acquisition is expected to strengthen Nigeria’s upstream oil and gas activities, particularly in onshore and shallow-water areas, and highlights the government’s commitment to increasing indigenous participation in the sector.

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The successful conclusion of the bid round, alongside other developments, marks a key moment for Nigeria’s oil and gas industry:

Increased Local Participation: Indigenous companies are taking the lead, showing their capacity to drive the sector’s future growth.

• Transparency and Accountability: The government’s adherence to the PIA and its “Drill or Drop” provision ensures that idle assets are reclaimed and reintegrated into the market.
• Economic Impact: The sale of Shell’s assets and the growing involvement of indigenous firms are expected to drive job creation, infrastructure development, and increased revenue generation.
• Fuel Price Stabilization: Price cuts by Dangote Refinery could help stabilize domestic fuel prices, benefiting both consumers and the broader economy.

As the government prepares for the 2025 bid round, there is optimism that initiatives under the PIA will continue attracting investments, enhancing energy security, and contributing to Nigeria’s economic growth.