The Nigerian Upstream Petroleum Regulatory Commission has commenced the technical screening of financially qualified bidders in the 2024 licensing bid rounds.

The commission said it would evaluate each company’s technical capacity to operate the oil blocks it bid for at this stage.

In a publication, the commission stated that 31 oil blocks—26 deep offshore blocks, three continental shelf blocks, and two onshore blocks—are on offer in the bid rounds.

The publication stated that 29 of the blocks are situated in the Niger Delta region and two in the Bida Basin.

Giving an update about the exercise which commenced in May, the NUPRC stated that the Registration and Pre-qualification stage ended on Friday, July 5.

The pre-qualification evaluation was said to have commenced the same day, leading to the shortlisting of successful bidders based on the financial capacity and viability; technical competencies of the companies; health safety and environment; and legal and regulatory compliance of the companies.

Successful companies have since been notified.

“The Pre-qualification Evaluation commenced the same day and was concluded on Sunday 7th July 2024. This led to the prequalification of successful bidders. The pre-qualification criteria were based on two main conditions – Financial Capacity and Viability and Technical Competencies of the companies. Other criteria considered were Health Safety and Environment (policy, statements, management system, certificates, records, etc) and Legal and Regulatory compliance of the companies.

“The commission has concluded the pre-qualification stage and the qualified companies have been notified in line with the guidelines,” the NUPRC said.

At the moment, the exercise is at the technical and commercial Bid phase for data access, data purchase, evaluation, bid preparation and submission.

This is expected to last until November 29, 2024.

“Currently, the licence round is the Technical and Commercial Bid Phase for Data Access, Data Purchase, Evaluation, Bid Preparation and Submission which is expected to last until 29th November 2024. Thereafter, the Technical Bids will be evaluated and qualified technical companies will be notified on or by 9th December 2024 for submission of commercial bids,” the commission stated.

It was said that the commercial bid will be for only the companies that have passed the technical bid evaluation.

“The Commercial Bid Conference, which will signify the end of the bid rounds, will only involve companies that have passed the Technical Bid Evaluation in line with published evaluation criteria. The Preferred Bidders of any blocks on offer will emerge based on the set commercial criteria.

“All companies that submit commercial bid will be required to provide performance security in the form of a letter of credit or performance bond issued by a bank acceptable to the commission or parent company guarantee in an amount equivalent to 2.5 per cent of the work commitment upon the grant of the licence to guarantee the fulfilment of the minimum expenditure committed to the implementation of the work programme.

”Finally, the winner of a block will be presented for ministerial approval and thereafter contract negotiation,” the commission explained.

The upstream regulator added that following years of dwindling investor interest in the industry, it has since its establishment in 2021, taken on the responsibility of opening the sector’s doors to local and foreign investors, to optimise Nigeria’s vast hydrocarbon resources-estimated to be about 37.5 billion barrels of crude oil and condensate reserves and 209.26 trillion cubic feet of natural gas reserves.

“Initially offering 19 onshore and deepwater oil blocks, strong investor demand and interest in the 2024 licensing round prompted the addition of 17 deep offshore blocks to the auction before five of the total 36 were subjected to litigation. A key attraction in the oil blocks available for bidding is their advanced technology features, emphasising the NUPRC’s commitment to embracing the latest global technological standards in the industry.

“The assets boast extensive 2D and 3D seismic data coverage, including multi-beam and analogue data, and also feature high-quality 3D reprocessed pre-stack time migration, offering unprecedented detail and clarity to prospective bidders,” the NUPRC publication stressed.

The PUNCH recalls that the regulator recently removed five oil blocks from the ongoing licensing round due to legal disputes. The affected assets are PPL3008, PPL3009, PML51, PPL267, and PPL268.