Nigeria plans to launch a new oil licensing round in mid-2020 for both offshore and onshore blocks in a bid to hit its 3 million b/d output target by 2023, the Group managing director , Nigerian National Petroleum Corporation, Mele Kyari has said.
Kyari said the bidding round will be launched after the government concludes talks with foreign oil companies on new fiscal terms for oil exploration following recent amendments to the law.
In early November, Nigeria increased taxes on companies operating in its deepwater blocks. Kyari stressed that “despite the amendments, there is room for negotiations and we hope to conclude these negotiations by mid next year.”
Industry analysts have expressed concerns that the recent plans by Nigeria to hike taxes on its deepwater oil production could spur divestment by foreign oil firms from Africa’s largest producer and hinder further output growth.
“There is no doubt that Nigeria has huge barrels of oil assets yet untapped, the government only needed to create the right investment climate for operators,” Ahmadu-Kida Musa, deputy managing director of Total E&P Nigeria Ltd, said at an industry event in Lagos
On November 4, President Muhammadu Buhari signed into law an amendment of the fiscal terms for existing production sharing contracts between foreign oil producers and the NNPC. This increased the government’s share of revenue from oil produced from deepwater fields.
Nigeria needs the help of international oil companies to raise exploration activities in the country if it is to meet targets to raise production to 3 million b/d by 2023, Kyari added.
The country’s crude and condensate production has risen sharply in the past 12 months to around 2.1 million b/d, due to the startup of the 205,000 b/d deepwater Egina field. The field came on stream in late December.
Output from the deepwater fields of Bonga, Erha, Agbami, Akpo, Usan and Egina, has sustained Nigeria’s oil production in the face of a decline from its onshore blocks in the Niger Delta.
This decision comes as other producers in the region have sweetened their fiscal terms to attract foreign investment into the beleaguered oil sector.
Angola recently improved the fiscal terms for some oil contracts, giving international oil companies higher returns and opening up offshore and onshore basins Last year, Gabon revised its hydrocarbon code including withdrawing corporate tax to lure investment into its beleaguered oil sector.
For a better society