Nigeria to offer 30 oil and gas blocks in 2007 bid round

Mar 16, 2007 01:00 AM

The Federal Government of Nigeria has concluded arrangement to offer 30 oil and gas blocks in the 2007 bid round scheduled for April, even as OPEC oil ministers, agreed to maintain output levels at 26.3 mm bpd, an indication that the organisation is comfortable with the current $ 60 a barrel price level.
Speaking at the end of the 144th meeting of the OPEC Conference in Vienna, Austria, Dr Edmund Daukoru, Energy Minister said a number of reviews had to be made from a policy point of view.

"First, there are countries with which we have developed a very strong bilateral relationship for major infrastructural development like the railways, hydro schemes, telecommunications, and major gas pipelines. These countries have to be treated with the rules of transparency and still there is some assurance that they will get the blocks. So, we have to come up with a process that guarantees transparency and due process," he said.
He noted that one way government tried to do this was the introduction of the "right of first refusal" which was applied in the last round, adding that there were misunderstandings about government's intentions.

"There is this delicate balance between ensuring due process and transparency while also assuring our development partners that they will get the blocks. This process had to be extensively debated by a technical committee drawn from the Ministries of Finance and Justice, NAPIMS and NNPC.”
"Their brief was to ensure that our national interest is protected while we follow due process and ensure transparency. This takes a bit of time and I am hopeful that as soon as I get back and get presidential clearance, I would announce the round," he said.

Dr Daukoru also said government's plan to introduce the use of 10 % ethanol in Nigerian cars has been delayed by efforts to put the right regulatory/legal framework in place, adding that this has been sorted out.
"As I speak with you, the regulation went to council yesterday. I have not checked whether it was deliberated and signed on, but I am aware that it is well structured. Secondly, we had to upgrade our storage facilities to receive ethanol and they are ready now. We were to test the market with imports until domestic production comes on stream. Ethanol is corrosive especially when mixed with water. During the rains, there tends to be moisture in the storage and dispensing facilities. We would be able to land products within two weeks of government approval," he said.

On the outcome of the OPEC meeting of ministers, he said: "We came away with an assurance of the firming up of oil prices. In the past few months, since August last year, we have seen the build up of stocks that is why we made a big cut in Doha and Abuja amounting to a total of 1.7 mm bpd in cuts for OPEC member countries. This was just to firm up the price. I came away with a reassurance that members would comply fully, that the excess in the market would be mopped up in a matter of time."
"The market is stable, the market is healthy," OPEC Secretary General Abdalla Salem El-Badri of Libya told. "We don't need to touch it this time."

Actual cuts have been only about 1 mm bpd. Still, they have helped to drive oil prices back from levels below $ 50 a barrel toward $ 60 a barrel. Oil prices edged higher after OPEC's decision and figures showing that US supplies of gasoline and other refined products fell.

Source: Vanguard
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