Stakeholders in the oil and gas sector said that the previous rounds in Nigeria's marginal oil fields revealed a sharp decline in interest from serious investors, both local and foreign.
Stakeholders therefore recommended that the terms governing the licensing round be open and transparent, saying that this will increase investor confidence.
This was part of the resolutions reached at the end of a one-day workshop on improving transparency in the oil licensing process, organized by a coalition of civil society and media organizations.
The resolution was contained in a statement released at the end of the virtual workshop. The statement was jointly signed by Peter Egbule of the Coalition of Civil Society Organizations and Bassey Udo, Media Initiative on Transparency in Extractive Industries.
The workshop also recommended that, for transparency purposes, oversight of bidding processes be carried out by the National Assembly, audited by the Nigeria Extractive Industry Transparency Initiative (NEITI) and continuous monitoring before, during and after the bidding process by civil society organizations. and the media.
Stakeholders during the workshop raised concerns that Nigeria's daily oil production has consistently decreased from about 2.3 million barrels per day in 2014 to 1.6 million barrels per day in 2019.
“In 2005, only 57% of the oil blocks offered at auction guaranteed at least one offer. The number dropped to 40% in 2007. Many serious investors were concerned about the law that regulated operations in the oil industry. They complained that the legal framework gives many powers to the Minister of Petroleum Resources to grant or revoke licenses based on his discretion, "the statement said.
Stakeholders said the workshop was necessary because of the recent announcement by the federal government of its intention to carry out a new round of tenders for Nigeria's marginal oil fields
Stakeholders in the statement made a number of recommendations to help improve Nigeria's chances of delivering the next round of oil bidding that not only meets globally acceptable standards, but also meets established national goals to increase oil revenues, increase reserves proven national oil prices and increase the country's daily oil production capacity.
He stated that, prior to the start of the bidding rounds, Nigerians should provide evidence of the following four main results: A national economic development plan detailing how expected signature bonuses would be used in the implementation of the plan to benefit the overall development of the industry and growth.
Others include a national data repository to be used as a single source of verified data, open to all parties to the bid; Widely disclosed information on the value of assets to be included in the basket of assets to be offered, to eliminate arbitrage opportunities resulting from information asymmetry;
“As a prerequisite, President Muhammadu Buhari must publicly state that he would not invoke his discretionary powers as Minister of Petroleum Resources before, during and after the bidding process.
"This public statement is critical to restoring the confidence of serious investors to participate in the bidding process, trusting that whatever the outcome will not be subject to any intervention by the board outside strict adherence to the approved bidding guidelines and rules," said the communicated.
The statement further says: “During the bidding process, Nigerians must provide evidence of the following: Strict selection criteria during the bidding process to limit the exclusive pool to only companies with the necessary financial and technical capabilities.
“Comprehensive details of all potential candidates in a medium easily accessible by members of the public; Measures to effectively monitor the bidding process to ensure that successful companies pay their signature bonuses in full and in government-designated accounts. "