•FG approves Shell’s $2.4bn oil, gas assets sale to Renaissance, says consortium

Emmanuel Addeh in Abuja and Peter Uzoho in Lagos

In Nigeria’s first oil bid round conducted under the Petroleum Industry Act (PIA) 2021, many indigenous oil and gas companies yesterday emerged winners of onshore and deep offshore oil blocks otherwise known as Petroleum Prospecting Licences to begin exploration, development and production activities on the assets. 

Just as it emerged yesterday that Dangote Refinery had crashed petrol prices to N899.5 (cash payment) for two million litres and a matching two million litres on a bank guarantee (BG) valid for 15 days (Access, Zenith & First Bank), and N895 (cash payment) for 10 million litres and a matching 10 million litres on a BG valid for 15 days (Access, Zenith & First Bank), from the N970 per litre announced by the company last month.

Also, yesterday, the Renaissance Consortium announced in a statement that the federal government had finally approved Shell’s $2.4 billion onshore and shallow-water assets sale to Renaissance Group, the consortium of five firms that had purchased the asset.

Recall that on January 16 this year, Shell had announced that it had reached an agreement to sell its Nigerian onshore subsidiary, the Shell Petroleum Development Company of Nigeria Limited (SPDC) to Renaissance, a consortium of five companies, comprising four exploration and production companies based in Nigeria and an international energy group.

At the commercial bid conference for the 2022/2023 Mini Bid Round and the 2024 Licensing Round held in Lagos yesterday, Nigerian companies including Sifax, MRS, Applefield, FIRST E&P, Sahara Deepwater, among others, emerged winners of oil blocks in the 31 PPLs put on offer by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) in 2022 and 2024.

Of 31 blocks initially put on offer by the NUPRC – seven in the 2022/23 Mini Bid Round and 24 offered in the 2024 Licensing Round, bidders only showed interested in 25 blocks while six assets failed to attract any bid.

Curiously, the Nigerian National Petroleum Company Limited (NNPC) failed to win any block despite appearing as qualified bidder in some blocks as it lost to MRS and others competitors.

At the occasion, NUPRC announced that it would be conducting another bid round in 2025 after the completion of the current exercise, adding that it had begun the implementation of the Drill or Drop provision in the PIA to ensure that idle blocks are taken away from the holders and put back into the basket for auctioning.

However, according to the results of the bid exercise announced real-time at the conference, Sifax & Royalgate Consortium won two deep offshore blocks -PPL 300-DO and PPL 304-DO. 

Ocean Gate Engineering Oil and Gas Limited won two deep offshore assets -PPL 302-DO and PPL 3007.

Panout Oil and Gas Limited won one cluster block PPL 300/301CS and PPL 3015. TotalEnergies Exploration and Production Nigeria Limited won PPL 2000/2001; and MRS won PPL 303-DO.

Also, Hakilat Oil and Gas Consortium won PPL 305-DO and PPL 3016. Biswal Oil and Gas Limited won PPL 306-DO and PPL 2002; while Sahara DeepwaterResource Limited emerged winners of two blocks -PPL 270 and PPL 271.

Other winners were: First Exploration and Petroleum Development Company Limited – PPL 2003 and PPL 2006; Dewayles International Limited -PPL 2004 and Broron Energy Limited – PPL 2009.

Also, Applefield Oil and Gas Limited won two assets – PPL 2005 and PPL 3017; R28 Holdings Limited won PPL 2007 and PPL 3011 while Petroli Energy Marketing and Supply Limited won PPL 269.

Similarly, Tulcan Energy Exploration and Production Company Limited won two assets -PPL 2008 and PPL 3012.

Presenting the summary of the result of the bid exercise, Chief Executive of NUPRC, Mr. Gbenga Komolafe, said the bid round was the most transparent in the history of the Nigerian upstream oil and gas industry.

He noted that the exercise was in compliance with the provisions of Section 73, Subsection 1A of the PIA, which states that bid exercise shall be conducted in the most transparent, fair and competitive atmosphere.

Proceeding with the declaration of the results, Komolafe said: “So the first is PPL 300-DO, it was won by Sifax and Royal Gate Consortium. And for that asset, the company is the only bidder, so there’s no reserve bidder. So, in effect, Sifax won that block. 

“Also, we have PPL 302-DO, it was bidded and won by Ocean Gate Engineering Oil and Gas Limited. And also, there’s no reserve bidder in that respect.

“We have PPL 303-DO, won by MRS Oil and Gas Company Limited. The NNPC Limited is a reserve bidder in that exercise.

“For PPL 304-DO, Sifax & Royal Gate Consortium won that block. But there’s a reserve bidder by Homeland Integrated Offshore Services Limited.

“For PPL 305-DO, Hakilat Oil and Gas Consortium Limited won the block. NNPC E&P Limited is a reserve bidder.

“For PPL 306-DO, Biswal Oil and Gas Limited won the block. Also, for PPL 269, Petroli Energy Marketing and Supply Limited won the block.

“For PPL 270 and PPL 271, Sahara Deepwater Resources Limited won the two PPLs.

“For PPL 300 and PPL 301CS, I think it’s listed as a cluster. It was won by PanoutOil and Gas Limited.

“For the cluster, we have assets PPL 2000 and PPL 2001. TotalEnergies Exploration and Production Nigeria Limited Nigeria Limited won the cluster, with a reserve bidder in Star DeepWater Petroleum Limited.

“Then, PPL 2002 was won by Biswal Oil and Gas Limited. Of course, there’s no reserve bidder.”

He added, “For PPL 2003, First E and P Development Company Limited. There’s no reserve bidder. For PPL 2004, Dewayles International Limited won the block. PPL 2005 was won by Applefield Oil and Gas Limited.

Earlier in his opening address, Komolafe revealed that the commission has begun the recovery of Idle oil blocks in Nigeria as it announced a fresh oil licensing round for 2025.

According to him, the 2025 licensing round will focus on underexplored assets, fallow fields, and natural gas development as part of Nigeria’s commitment to the UN Sustainable Development Goals.

Komolafe emphasised that the NUPRC aims to make the licensing rounds an annual event to address challenges such as declining production and rising global competition.

He stated, “While we are proud of our recent achievements as industry stakeholders, we must remain mindful of the challenges ahead. Declining production levels and increased global competition demand strategic action. Fortunately, the Petroleum Industry Act has given us a unique opportunity to transform the industry, attract investment, and position Nigeria as a leader.

“To this end, I am pleased to announce that the NUPRC will launch another licensing round in 2025. Building on the lessons learned from this year’s round, the 2025 exercise will focus on discovered and undeveloped fields, fallow assets, and prioritise natural gas development to support Nigeria’s commitment to the UN Sustainable Development Goals.”

Komolafe further explained that the regulator’s focus has been on restoring investor confidence in the industry, adding that this has been achieved by ensuring that its activities are fully aligned with the provisions of the Petroleum Industry Act.

He said, “What we are doing here today is not a matter of discretion by the commission but is in line with the statutory provisions of the Petroleum Industry Act. The law stipulates that the commission should conduct licensing rounds.

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