FG to Conduct Fresh Oil Blocks Bid Rounds in 2020 – TheNigerialawyer

* Nigeria, Germany seal €70m economic cooperation
agreement

The Minister of State for Petroleum Resources, Mr. Timipre
Sylva, yesterday disclosed that the federal government plans to
conduct oil blocks bid rounds in 2020.

This comes amid growing concerns about government’s inability to
hold oil blocks bid rounds in the last 12 years, which could result
in dwindling oil reserves and production, with attendant
consequences on oil revenue and the economy as a whole.

Sylva, who announced the forthcoming oil blocks bid rounds in an
interview with Bloomberg Television, however did not disclose
precisely when it would take place in 2020, the oil acreages that
would be put out in the expected rounds or the processes to be
adopted.

On the same day, the federal government notified that it had
sealed a €70m economic cooperation agreement with the Germany,
which would enable the European country provide assistance to
Nigeria in key areas of the economy.

Speaking in a Bloomberg Television programme, Sylva, noted that
plans were on to conduct oil block bid rounds next year because the
country primarily had not awarded fresh oil leases since 2007.

He said apart from the revenue Nigeria could gain from the fresh
bid rounds, it wanted to get more people into its oil sector,
hence, the decision to hold bid rounds next year.

Previous efforts to hold licensing rounds for major and marginal
oil fields during the tenure of Dr. Ibe Kachikwu as Minister of
State for Petroleum Resources were not successful, as President
Muhammadu Buhari was said to have rejected the processes submitted
to him for approval.

However, Sylva said in the Bloomberg interview when asked about
new oil licensing rounds: “That’s very much on the table for next
year. It will be within next year hopefully.”

On the reasons for the new rounds, he said the need to raise
revenue was part of it, adding: “But also to expand the space in
Nigeria. There have been no bid rounds in Nigeria since 2007 and we
think that it is due for us to have a bid round in Nigeria. It is
too early to talk about it now, but I will tell you later.”

The minister explained that Nigeria’s oil production went down
to 1.6 million barrels (mb) on Thursday because the Nembe Creek
Trunk Line (NCTL) was down.

He equally admitted that Nigeria produced oil in excess of its
Organisation of Petroleum Exporting Countries (OPEC) output quota
in August but has since restricted itself to the production
quota.

“We do year-to-date, 2.1 million barrels, crude and condensate.
Crude year-to-date is 1.8mb. Yesterday production was 1.6mb because
the NCTL is down. We had some over-production in August, and we
committed to cutting down and we did in September and further down
to December. We are going further and getting Gabon and South Sudan
to cut their production,” Sylva explained.

Asked what he thought about the state of the oil market with
regards to Saudi Arabia’s production downtime and prices, Sylva
said: “We have our next meeting in December and at that meeting we
will decide. It will all depend on how things are going; things
cannot be predicted. We left in September and Saudi Arabia
happened, but if we need to make deeper cuts in December, we will
make cuts.

“Everybody agree at the OPEC that we need to stabilise the
market and cannot allow prices to plummet, and if prices are going
southwards, we need to do some more cuts and we are ready to make
that sacrifice.”

According to him, “It is so extremely difficult to predict these
days because things happen and the market don’t react as it should,
but we believe that prices will remain where they are now. The
outlook isn’t very good for next year because of the geopolitical
tensions.”

Asked if Nigeria preferred to produce more oil or cut down
production to raise prices, the minister stated that: “It is a
balancing act of low oil and higher price, we look at what benefits
us more and see that when you cut and see that the price is stable,
then it helps us to predict better.”

He expressed regrets at the decision of Ecuador to leave the
OPEC framework, but added that some more countries were asking to
join the OPEC, in addition to the cartel’s alliance with non-OPEC
members led by the Russian Federation, which he claimed was
comfortable for OPEC.

On US oil production, he said: “We don’t really see US
production as a threat because it is a flash in the pan. We believe
it has peaked and we will only see a downward trend in US
production.”

Nigeria, Germany seal €70m economic cooperation
agreement

Meanwhile, the federal government yesterday sealed a €70m
economic cooperation agreement with the government of Germany.

The pact would enable the government of Germany to provide
assistance to Nigeria in key areas of her economy.

The Minister of State for Finance, Budget and National Planning,
Clem Agba signed for the Federal Government of Nigeria while the
Head of German Delegation to Nigeria, Christoph Rauh signed for his
country.

Speaking at the event, Agba described Germany as a reliable
partner in terms of bilateral economic cooperation.

He said the areas of interventions by the government of Germany
were in line with the inclusive growth agenda of the Federal
Government of Nigeria as contained in the Economic Recovery and
Growth Plan.

He gave some of the areas as infrastructure, finance,
governance, renewable energy, vocational training, job creation,
microfinance, ease of doing business, polio eradication and safe
school initiative among others.

Agba said, “The areas of interventions by the government of
Germany are in line with economic sustainability and inclusive
growth.

“We must, therefore, make necessary efforts to ensure that the
opportunities offered by these interventions and other similar
initiatives are not misplaced.”

Earlier, Rauh said the intervention in Nigeria was based on his
country’s strategic plan for Africa.

He commended the Nigerian government on the reforms being
implemented in the area of ease of doing business, corruption and
money laundering.

He however called on the government to increase the level of
support to displaced people in the North East region.

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