The possibility of having an oil and gas bid round this year appears to be bleak as the coronavirus pandemic continues to affect global economies and foreign investments.
Indeed, the United Nations Conference on Trade and Development (UNCTAD) had projected that the COVID-19 epidemic could bring global foreign direct investment flows to their lowest levels since the 2008-2009 financial crisis.
The Minister of State for Petroleum Resources, Timipre Sylvia, had stated that the government would conduct a smaller bid round for marginal fields and thereafter focus on a major bid.
Though unrealistic deadlines have been set for the passage of the Petroleum Industry Bill (PIB) initiated decades ago, Sylva insisted that the PIB, which would facilitate the bid round, would be passed before May this year.
However, the Director/CEO of the Department of Petroleum Resources, Sarki Auwalu, stated that conducting bid rounds for marginal fields this year might be unrealistic, considering the state of the global economy.
Auwalu, in a chat with The Guardian, noted that the timing is not right, considering the raging pandemic and equally added that the oil industry is maturing.
According to him, the OPEC presently pegs the country’s production and it will be foolhardy to sell fields to operators when production output is being monitored.
“If you look at this way; we have coronavirus that collapsed the world economy; we have lower prices both of gas and crude; is it wise for a country to bring up an auction for its resources at this time? Even if the government wants to go ahead with it I will advise that this is not the right time.
“I believe people put more hype in it than what it takes inside and like I told you, the industry is maturing but people are not seeing what is on ground. It is strategic for government not to bring everything and after all, OPEC restricts us. Secondly, the immediate investment is there; thirdly, we need to focus on gas, as there is also a need for someone to manage the resources and advise government adequately.
“So, I do believe that at the right time and moment, government needs to really take advantage of when it is loudest and for example, this is not the right time to auction anything. So, for me, in as much as we talk about this, we have to be mindful of the challenges because we have competitors around us onshore and offshore”, he added.
It will be recalled that Sylva said one of the mandates of the current administration was to develop the oil and gas industry, while making the masses benefits from the sector, particularly through affordable and sustainable products.
He said the approach of the current administration towards addressing the nation’s moribund refineries would be to rehabilitate and cut off government’s involvement, allowing private owners to manage it for profitability and efficiency.