Accessibility links

Big Investors Fail to Bid at Nigeria Oil Auction


The Nigerian government sold only about half of 45 oil-exploration licenses it put up for auction Friday, with interest coming mostly from little-known investors.

Most bids submitted bids for the 45 exploration blocks came from domestic companies. Nigerian officials said international companies declined an offer of priority bidding rights for certain fields.

Oil-industry experts blame the lack of interest on the auction's timing, less than three weeks before a new Nigerian administration is due to take office. The change of power on May 29 has triggered worries that deals made now could be annulled in the future.

The opposition Action Congress Party has accused President Olusegun Obasanjo of using the sales as a final opportunity to reward his allies before President-elect Umaru Yar'Adua in sworn in.

When Mr. Obasanjo took power in 1999, he revoked exploration rights granted by his predecessor days before the transition to civilian rule.

Also complicating Friday's bidding was a court order earlier this week barring the government from selling two exploration blocks whose ownership is disputed by Shell Oil Company.

Nigeria's open bid process was introduced in 2005 to encourage transparency and openness in the country's oil sector. Before then, oil blocks were allocated on a discretionary basis, which brought complaints of widespread abuse.

Some information for this report was provided by AFP, AP and Reuters.

XS
SM
MD
LG