Olushola Bello
It is imperative to note that Africa has once again demonstrated its ability to attract new investment dollars. With exploration spending at a 4-year high, recent events have underscored that hydrocarbons will continue to play a vital role in the global energy mix well beyond 2050. Africa is proving to be an increasingly interesting player in the search for new hydrocarbons. The recent exploration successes across the continent are clear indicators of this trend.
Coming on the back of recent deliberations at CERAWeek and OTC, Nigeria’s launch of its 2024 licensing round couldn’t have come at a better time. Nigeria remains exceptionally attractive in terms of geology for hydrocarbon exploration and production within the continent. I had the honor of serving as a panelist on 2 of the 3 recent international roadshows organized by Nigeria Upstream Regulatory Commission hashtag#NUPRC with the theme “Unveiling Nigerian Energy Development Strategy.” A 4th one is slated for Lagos, Nigeria, in the coming weeks.
This licensing round offers a new pathway for foreign direct investment (FDI) into the upstream oil and gas sector, which has been facing fierce competition in attracting FDI from regional peers lately. It is also a strategic move that complements the nation’s quest for energy security.
The exercise, from the initial announcement through to final contract negotiation & signing, is expected to be concluded within 9 months, alongside the earlier announced deepwater (7 blocks) mini-bid rounds. 12 blocks are on offer this time: (2 onshore, 6 continental shelf, & 4 deepwater). Details are available on www.br2024.nuprc.gov.ng
One major highlight of the bidding exercise, which has been applauded by many, is the significantly reduced entry fees—now determined on a case-by-case basis that corresponds with current industry realities. Other highlights include automated permitting & licensing process, robust & flexible local content policy, attractive fiscal regime, available in-country capacity in terms of resources & technology. A comprehensive work program to capture plans such as zero flare & decarbonization initiatives are to be submitted.
Despite having proven reserves of 37.5 billion barrels of oil and 209 trillion cubic feet of gas, Nigeria remains largely underexplored. The target remains 50-60 bbo & over 400 tcf of gas in the foreseeable future. There is a renewed spirit of optimism on the back of recent reforms & the strides recorded by hashtag#NNPC, hashtag#NUPRC, & the industry at large. The increase in rig count and the flurry of well intervention activities are testimonies to this.
The 2024 licensing round thus presents a timely and strategic opportunity for Nigeria to attract investment, enhance energy security, and solidify its position as a leading player in Africa’s evolving hydrocarbon landscape.
Nosa Omorodion is a director with Schlumberger
