Nigeria has announced plans to auction off seven deep offshore oil blocks. The Nigerian Upstream Petroleum Regulatory Commission, led by Chief Executive Officer Gbenga Komolafe, acknowledged the claim and stated that the intention to hold a transparent bidding round will be disclosed by November.
The auction is taking place 15 years after the last one. Between 1993 and 2007, the government issued scores of such permits to open up the ocean floor to oil and gas extraction.
The oil blocks, which are off the coast of Lagos in southwest Nigeria, range in depth from 1,200 meters (3,936 feet) to 3,100 meters. As opposed to the typical position in the Niger Delta, Komolafe claims that this location is advantageous because of its proximity to the export free zone in Lagos.
Nigeria’s oil output was at the lowest since 1990 as its crude oil production fell below 1 million barrels per day (bpd) in August 2022. And data from the Organisation of the Petroleum Exporting Countries in early September showed that Angola and Libya had overtaken Nigeria as Africa’s highest crude oil producers. The government blames rampant crude theft on the pipelines that crisscross the Niger Delta for shutting down wells and killing off investment.
Deep-water production driven by foreign corporations such as Shell Plc and TotalEnergies SE has accounted for approximately 35% of oil output in recent years, but its share has increased this year as onshore producers struggle. In addition to issuing new licenses, the government is encouraging existing block holders to develop more of their offshore land.
