Business Hilights
Tracking Nigeria's Headline Business News Online

Advert space

COVID-19 may further derail oil licensing round bids this year

Strong indications are rife that the planned oil and gas licensing round bids planned to hold this year may not be a reality after all.

Before now, both the Minister of State for Petroleum Resources, Chief Timipre Sylvia and the Director/CEO of the Department of Petroleum Resources (DPR), Sarki Auwalu, had at different fora assured that the bid rounds would be done this year.

But unfolding developments and uncertainties created by oil price slump and COVID-19 pandemic are posing serious threats against the bid round which analysts say would have raised the quantum of foreign direct investments in Nigeria’s oil and gas sector.

Aside the impacts of COVID-19 and oil price slump, observers had been disturbed over the endless pursuit of Petroleum Industry Bill (PIB) initiated decades ago which would facilitate the bid round, would be passed before May this year.

In a recent media chat, DPR chief, Auwalu, stated that conducting bid rounds for marginal fields this year might be unrealistic, considering the state of the global economy and the positions of OPEC which presently pegs the country’s production.

According to him, “It will be foolhardy to sell fields to operators when production output is being monitored.”

“If you look at this way; we have coronavirus that collapsed the world economy; we have lower prices both of gas and crude; is it wise for a country to bring up an auction for its resources at this time? Even if government want to go ahead with it I will advise that this is not the right time.

“I believe people put more hype in it than what it takes inside and like I told you, the industry is maturing but people are not seeing what is on ground. It is strategic for government not to bring everything and after all, OPEC restricts us. Secondly, the immediate investment is there; thirdly, we need to focus on gas, as there is also need for someone to manage the resources and advise government adequately.

“So, I do believe that at the right time and moment, government needs to really take advantage of when it is loudest and for example, this is not the right time to auction anything. So, for me, in as much as we talk about this, we have to be mindful of the challenges because we have competitors around us on shore and off shore”, he added.

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More