Nigerian Government Taps 4 Oil Companies for Deepwater Block

The Nigerian Federal Government has picked four oil companies to bid for the exploration rights to deepwater block OPL 256. The Department of Petroleum Resources opened the bids for the selective tendering from the four companies, including Shell. This was a closed-door session. Industry officials were caught off guard when news of the bid opening came out, as the block is one of the numerous deep and ultra deep offshore blocks oil firms are warming up to bid for, in the now delayed fresh round of licensing.

DPR officials defended the selective bidding for the block, saying that the government can pre-qualify bidders for certain blocks. "It is allowed in the industry. It is just one of the ways acreages are awarded in the oil industry," said one official.

There is the open tendering process adopted by the government for the year 2000 licensing round, and which it said, would be adopted for the next (2003) licensing round as well as for the award of oil blocks in the Gulf of Guinea region. The Federal Government hopes to achieve oil reserves of 40 billion barrels and production of four million barrels per day (bpd) by 2010, through the awards of acreages from these regions.