Minister of Petroleum Diezani Allison-Madueke
NNPC
Nigeria will hold its first oil exploration bidding round for five years by the end of this year, while licence renewal talks with Shell and Chevron over existing onshore fields are in their final stages, Minister of Petroleum Mrs Diezani Allison-Madueke said on Tuesday.
Nigeria is Africa's biggest oil producer, exporting around 2 million barrels per day (bpd) and it also holds the world's ninth largest gas reserves, which are largely untapped.
The country's light, low sulphur crude oil is popular with U.S. and Asian buyers, but oil majors say uncertainty over changes in regulation in a proposed oil bill and insecurity in the onshore Niger Delta are holding back new investment.
"We expect within the next couple of months a marginal bid round will be announced. We hope a major bid round will follow before the end of the year," the minister told Reuters in an interview.
"Shell and Chevron (onshore licence renewals) are ... in the final stages now, those will definitely be out before the end of the year," she added.
Exxon Mobil signed 20-year oil licence renewals on Nigerian onshore assets producing around 550,000 bpd in February, but other oil majors are still negotiating terms with the government.
Some industry experts have questioned why licences are being renewed before parliament has passed the Petroleum Industry Bill (PIB), which will adjust terms on these types of contracts.
"It would have become slightly cumbersome to keep waiting on the PIB before the renewals," Mrs Alison-Madueke said in reply.
Nigeria's parliament is currently debating the PIB, a wide-ranging law which has been delayed for more than five years on disputes between oil firms and different arms of government.
If it becomes law, the bill should end years of regulatory uncertainty that has blocked billions of dollars of investment.
Foreign oil majors, including Shell and Exxon, have said the tax terms in the current version of the PIB would make exploration deep offshore, which is the key to growing Nigeria's oil and gas output and reserves, non-viable.
"I think it is very difficult in general if you have been receiving a certain level of profit over quite a long period of time, to adjust to a slightly lower level of profitability," the Minister said of the oil majors' complaints.
"We went over these terms several times ... we kept ourselves competitive," she added.
She said after the changes were made in the PIB, Nigeria's "government take" on offshore projects would increase by 10 percent to 73 percent, lower than in rival producers Angola, Norway and Indonesia.
The PIB is meant to overhaul everything from fiscal terms to the state-owned Nigerian National Petroleum Corporation (NNPC).