Nigeria cancels award of 29 oil blocks

Local sources report that the federal government of Nigeria has cancelled the award of 29 oil blocks secured by prospective investors during the 2005 bid round for oil and gas blocks.

Offshore staff

(West Africa) - Local sources report that the federal government of Nigeria has cancelled the award of 29 oil blocks secured by prospective investors during the 2005 bid round for oil and gas blocks.

The inability to meet the Dec. 15, 2005, deadline for payment of the signature bonuses posted on the blocks was cited as the reason for cancellation.

The government was determined to meet the $2.6 billion revenue target for the licensing round.

There are 15 oil blocks for which successful bidders have paid up fully, and the Nigerian National Petroleum Corp. (NNPC) is preparing the production sharing contract agreement.

The affected blocks are mostly acreage awarded to Nigerian companies.

Dr. Edmund Daukoru, the Minister of State for Petroleum Resources, had hoped to increase indigenous participation in the upstream oil and gas sector in the 2005 bid round.

Available records indicate that Conoil, which won deepwater block OPL 257 for $100 million and the Oando consortium in OPL 325 for $50.25 million signature bonus, are the only indigenous companies that had fully paid for their acreage.

01/04/06

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