Nigeria wins $ 1.2 bn from oil licensing round

The Nigerian Federal Government has so far raked in $ 1.2 bn (N 156 bn) from oil blocks awarded in the 2005 Licensing Round, the Department of Petroleum Resources revealed.
DPR Director, Mr Tony Chukwueke told that the amount, which was about 50 % below the revenue expected from the bid round, came from the performance bond submitted by bankers to companies, in respect of the signature bonuses offered on the acreage. Chukwueke said the deadline for payments for the oil blocks had been extended by two months till December 15. The deadline had been shifted previously from October 2 to October 14, 2005.

After the criticism that trailed the high prices offered by winners of the oil blocks awarded at the bidding conference held last August in Abuja, the DPR directed the companies to submit a performance bond to indicate their ability to pay the signature bonuses offered.
"The response so far has been largely successful. The companies as at close of business posted bonds worth $ 1.2 bn out of the $ 2.6 bn that we expected. If you include the 10 % LCV that we did not require to post bond, we will come to 50 % of the money that was targeted," said Chukwueke.

He listed indigenous oil producer Conoil, fuel marketing company Oando, India's ONGC and the Korea National Petroleum Company as some of the firms that had submitted proof of payment and added that the Federal Government had also dropped the idea to grant the right of first refusal to participants at the bid round.
"Majority of the serious players pledged the bonds. However, government recognised that bond costs money and that some of the new players in the oil and gas sector required a bit more time to be able to find these bonds.”

"Mr President has directed and the minister has instructed me that we have to find a way to ensure that genuine investors who have difficulty posting these bonds have enough time to find them.”
"So we have decided that we will give those who have asked us more time, not to find the bond but to bring themoney. The period of bond is over. What the bond has served us is now to invite those who have pledged the bond to government to come forward for the finalisation of the PSC agreement.”

"The minister has agreed to sign all the PSC agreement in one day. So we are trying to put together a signing ceremony around December 15th, that time all the people who have posted bond and all those who have asked for extension should be in position to offer the money.”
"By this, no one will accuse the government of depriving them of the opportunity to participate in this round. So we will give an extra two months for all those who have asked for extension," said the DPR chief.

The results of the bid conference showed that 44 blocks out of the 77 blocks on offer, were allocated. Investors snapped up eight blocks in the deepwater region, which was to fetch about $ 1.0 bn (N 128 bn).
Investors won five blocks in the Anambra Basin, two in the Benue trough, while four blocks were won in the Chad Basin. All the six blocks put on offer in the onshore Niger Delta were snapped up, as well as the six acreage on the Continental Shelf.