The Federal Government of Nigeria ("FGN"), through its upstream oil and gas industry regulator, the Nigerian Upstream Petroleum Regulatory Commission ("NUPRC"), has announced the commencement of the mini bid round 2022 ("MBR") 1.
In its announcement, the NUPRC described the MBR as an opportunity to spur new exploration and drilling activities in the prospective deep waters offshore Nigeria and to attract global investors with the capability and proficiency in operating in a deep-water environment. This is consistent with the provisions of the Petroleum Industry Act 2("PIA"), from which the MBR derives its legal basis 3.
It was also stated that the MBR will build on the successes of the last oil block bid round held in April 2007, where a total of 45 (forty-five) blocks, drawn from the inland basins of Anambra, Benue, and Chad; the Niger Delta continental shelf; onshore Niger Delta and deep offshore, were put on offer 4. We note that the MBR will offer 7 (seven) offshore oil blocks 5.
Reminiscent of the 2020 Marginal Field Bid Round 6, the NUPRC has published a program portal that provides the expected flow of the MBR, including registration, prequalification requirements, and detailed guidelines for applicants 7. The NUPRC has stated that it is open to receiving applications from (local or foreign) individual companies or members of a consortium 8. After interested applicants complete their registrations on the program portal, the MBR is expected to take the following route 9:
- Prequalification of interested companies;
- Announcement of prequalified companies;
- Data purchase;
- Submission of technical bids by prequalified companies;
- Evaluation of technical bids;
- Announcement of results of technical bids; and
- Commercial bid conference/announcement of winning bids.
The MBR is expected to be concluded by the negotiation and issuance of a Petroleum Prospecting License ("PPL") to each successful applicant or group of applicants. In this regard, the PIA requires that a PPL shall only be awarded to companies duly registered under the Companies and Allied Matters Act, 2020 10. Accordingly, it is expected that any successful applicant would have complied with this statutory requirement, prior to the execution of a PPL.
As immediate next steps, it will be prudent for applicants to attend the pre-bid conference which is being organized by the NUPRC and scheduled to take place on 16 January 2023, ahead of the submission end date slated for 31 January 2023. Equally important is to have a legal team on your side to provide expert guidance and representation during the MBR process.
Please note that the information provided above is for general informational purposes only and is not intended to constitute legal advice. If you have any legal questions or concerns, please contact Dentons ACAS Law through any of the contributors of this publication.
Footnotes
1 Nigerian Upstream Petroleum Regulatory Commission, 'Announcement of the Nigeria Mini Bid Round 2022' https://www.nuprc.gov.ng last accessed 6th January 2023.
2 Petroleum Industry Act, 2021. s. 2(b) and (d)
3 Petroleum Industry Act, 2021. s. 73
4 Ibid, 1
5 They specifically are PPLs 300, 301,302, 303, 304, 305, and 306. They are located deep offshore Nigeria, within the Gulf of Guinea. The MBR oil blocks cumulatively cover an area of approximately 6,700 km2 and have water depths of 1,150m to 3,100m.
6 The 2020 Marginal Field Bid Round was commenced in 2020 by the FGN, through the Department of Petroleum Resources (now defunct) and was taken over by the NUPRC which spearheaded the issuance of Petroleum Prospecting Licences to successful applicants. The FGN had offered 57 (fifty-seven) fields (located on land, swamp, and offshore terrains) to interested bidders.
7 Nigerian Upstream Petroleum Regulatory Commission, '2022 Mini Bid Round Portal' https://br.nuprc.gov.ng/ last accessed 6th January 2023.
8 Nigerian Upstream Petroleum Regulatory Commission, 'Frequently Asked Questions' https://br.nuprc.gov.ng/ last accessed 6th January 2023]
9 Ibid, 9.
10 Petroleum Industry Act, 2021. s. 70(2)
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