Nigeria to Cut Size of Oil Blocks on Offer In 2005

Nigeria is to cut the size of the offshore oil blocks it plans to offer in 2005 by 50%, a government official said Wednesday.

"We are planning to reduce the size of the oil blocks from the current 2,500 km by half," Mac Ofurhie, director of Nigeria's Petroleum Resources told reporters.

Ofurhie said after reducing the size of the blocks, the government body will then decide exactly how many prospects will be offered under the 2005 licensing round.

He said Nigerian officials will offer the blocks as part of an international roadshow, scheduled to take place in Europe, the U.S. and Asia Pacific.

Nigeria's Presidential Advisor on Petroleum and Energy Edmund Dakouro said recently his country is to toughen terms on its offshore oil blocks.

Nigeria has been expected to offer around 15 deepwater blocks in early 2005 with the new tougher terms, reflecting the lower risk companies face drilling near proven major finds. Bids will be awarded around March or April 2005. Blocks in northeastern Nigeria's Chad Basin will also be offered.

To lure investors into the previously untried and technically challenging deepwater reserves, Nigeria initially offered better terms, giving companies the chance to recoup 100% of their investment before sharing revenues with the government.

The bulk of Nigeria's 2.4 million barrels a day of oil output is produced onshore through majority-owned joint ventures with the state's Nigerian National Petroleum Corp.