Accessibility links

Breaking News

Nigerian Opposition Criticizes Sale of Oil Blocks

The outgoing Nigerian government is entertaining bids in a last-minute auction on Friday of 45 oil exploration licenses. For VOA, Gilbert da Costa in Abuja reports that the plan is going ahead despite a court order not to sell two of them and widespread criticism over timing and transparency.

The Nigerian government says the sale of new oil drilling rights will grow reserves and production capacity, as well as generate income and attract new investment.

Nigeria expects to generate $500 million in signature bonuses alone from the auction.

The West African country, the world's eighth biggest exporter of crude oil, sits atop a colossal reserve of oil and gas.

The auction has attracted great interest from oil companies around the world despite ongoing violence in the oil-rich Niger Delta.

Energy Minister Edmund Daukoro has promised the auction will be fair and transparent. But analysts say the exercise is mostly for show and that the real decisions have been made in advance, with Asian companies most favored.

The timing of the bid is also causing controversy in Nigeria because it comes in the last days of the government of President Olusegun Obasanjo, who is scheduled to hand the office to president-elect Umaru Yar'Adua on May 29.

Lai Mohammed of the opposition Action Congress party says the process lacks legitimacy and credibility.

"We believe that in the twilight of an administration, it is questionable and quite improper for you to be auctioning oil blocks," he said. "What are you going to achieve by auctioning these oil blocks in less than three weeks to your departure?"

"You are only making sure that your cronies and friends are rewarded for loyalty. We believe it is indecent to hawk off billions of dollars worth of oil blocks in their twilight of their departure," he continued.

Ironically, Mr.Obasanjo revoked exploration rights that his predecessor granted days before Mr. Obasanjo took over in 1999.

In the current case, the authorities have ignored a court order suspending the sale of two of the 45 blocks until the court rules on a dispute between the oil ministry and Shell Oil Company.

Bidding was introduced in 2005 to encourage transparency and openness in the country's oil sector. Before, oil blocks were allocated on a discretionary basis, a process fraught with widespread abuse.

Eleven of the blocks are located in deep water offshore. Ten are in shallow waters. Thirteen are onshore in the troubled Niger Delta, and 11 are in the little-fancied inland basins.