The Nigerian government is unveiling this year's available oil concessions with off-shore offerings likely to be the most sought-after. Joe Bavier reports from the VOA West Africa regional bureau in Abidjan on how instability in the Middle East is boosting interest in West African oil, but violence on the mainland has investors wary.
Officials from Nigeria's oil regulatory agencies have announced what they are touting as a new, more transparent, system of awarding oil drilling concessions.
Special presidential adviser on oil and energy, Edmund Dakorou, said Nigeria is turning away from the corruption and insider dealing that have long plagued the licensing process.
"We've invited representatives from the energy ministries of Norway, UK, Brazil, and U.S. as well as international industry experts who have experience of this new process to observe our own efforts and provide guidance,” he said. “This will also help to obtain international investment in transparency and fairness, as well as raise the international standing of Nigeria with respect to transparency and fair business practices commitment."
Concessions are up for bidding this year in the Benue Trough, the Chad and Anambra Basins, and the country's top oil-producing area, the Niger Delta. But it is the offshore offerings that Africa energy analyst Olivia Amaewhule says will attract the most attention.
"I think the competition for those blocks is going to be intense because, well for now, because of the security issue and the fact that there's a possibility of making such large finds off-shore. Those are going to be the prime blocks on offer," she said.
International interest in West Africa's oil reserves has grown in recent years as a result of increasing instability in the Middle East.
Nigeria is one of the top 10 oil producing countries and is Sub-Saharan Africa's only OPEC member state. But around 90 percent of its exports come from on-shore operations. And ethnic conflict and repeated outbreaks of violence in the Niger Delta, which accounts for the majority of Nigeria's production, have forced many foreign companies to limit their activities there.
Off-shore drilling, Ms. Amaewhule says, allows companies to operate without the security worries that exist on the mainland.
She also says increased offshore exploration in the Gulf of Guinea have uncovered massive new reserves that remain largely untapped.
"In the deep water there have been some really large finds,” she noted. “Shell's bunker development, I think that's around one billion barrels of oil. There's Total's aqua-field. That's about 600 to 800 million barrels. So, in the deep water, there's the possibility of really large finds as well. And those sorts of finds are non-existent onshore just now."
Open bidding on Nigerian oil concessions is expected to begin next week, with winning bidders to be announced in July.
