76 oil blocs dormant eight years after allocation
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| Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke |
The Department of Petroleum Resources has said that 76 out of the 77 oil blocks awarded between 2005 and 2007 are largely dormant.
The Director, DPR, Mr. George Osahon, said at a forum on the 2005-2007 licensing round in Lagos on Thursday that the Federal Government awarded a total of 77 oil blocks through three bid rounds in 2005, 2006 and 2007.
He, however, expressed worry that only one of the blocks was currently producing, while less than 30 per cent of the remaining 76 were actively working.
Osahon lamented the fact that majority of the operators were using the delay in the passage of the Petroleum Industry Bill as an excuse not to develop their fields, arguing that this was improper and a ploy to blame the government for their challenges.
He said, “In the last three to four years, nothing has been happening in Nigeria’s exploratory sector, while in the marginal fields sector, only eight fields are currently producing out of the 24 fields awarded to 31 successful companies.
“Only one block is currently producing, while less than 30 per cent of the blocks are actively working; several Production Sharing Contracts have yet to be signed, bank guarantees yet to be put in place, work obligations not respected and downstream obligations not performed.”
According to the breakdown of the 2005-2007 licensing rounds, 14 of the 44 oil blocks awarded in 2005 are onshore, eight deep offshore and 11 located in the continental shelf, while the remaining 11 are located in the Chad Basin, Benue Basin and Anambra Basin.
Indigenous exploration and production companies got 65 per cent of the oil blocks awarded in 2005, leaving the remaining for foreign firms.
The DPR director further explained that 16 oil blocks were awarded in 2006 with indigenous operators taking 40 per cent.
Eight of the blocks are deep offshore blocks, three onshore, two in the Chad Basin, while the remaining three are located in the continental shelf.
Osahon explained further that another 17 oil blocks were allocated in 2007, nine of which are located onshore, one deep offshore and the remaining eight located in the continental shelf.
Indigenous operators got 85 per cent of all the oil blocks allocated in 2007, leaving the remaining 15 per cent to foreign operators.
Despite that, Osahon expressed regrets that only one of the fields had hit production.
He said that the Federal Government was concerned about the inability of the operators to meet industry targets for reserves and production capacity; limited activities in the oil and gas industry; and the implications for the industry’s vitality and social challenges.
