How FG Generated $615m in 2007 Bid Round--Ijeoma Nwogwugwu (Thisdayonline)

The 2007 oil licensing round held last Friday in Abuja has fetched the Federal Government $615.452 million in the form of signature bonuses to be paid by the winning companies that participated in the bidding conference.

A report of the revenue generated from the bid round which was obtained exclusively by THISDAY, showed that of the $615 million, 50 per cent, representing $351.536 million of the signature bonus was immediately deposited by the successful bidders on Friday in compliance with the 2007 oil licensing rules.

The balance will be paid on or before the execution of the production sharing contracts (PSCs) by the winning firms and the Nigerian National Petroleum Corporation (NNPC).

The report further indicated that out of the 45 oil blocks put up for auction by the Department of Petroleum Resources (DPR), only 18 oil blocks situated in deep waters, in the Niger Delta continental shelf and onshore received 60 bids (see table) from the contesting firms.

Meanwhile, four oil blocks to which companies have the rights of first refusal were part of the blocks contested for on the day of the bidding conference, with all of the companies signifying their preparedness to exercise their preemptive rights to the blocks by matching the highest bona fide bidders who had emerged during the bid round.

The blocks with rights of first refusal are blocks 2007, 275, 274 and 290. For block 2007 and 290, Conoil Production Limited emerged the highest bona fide winner with winning bids of $110 million respectively for the blocks. Conoil paid the mandatory 50 percent of $55 million for each of the blocks.

However, Dangote Oil and Gas which has preemptive rights to the blocks agreed to match the winning bid put up by Conoil and was given till today to pay the 50 per cent deposit of $83.750 million, representing the balance of the deposit it had paid on Friday.

If Dangote Oil and Gas fails to pay the deposit before the close of business today, it shall forfeit its rights to the blocks which will go to Conoil.

Similarly, Energy Resources Limited and Sterling Global E & P exercised their preemptive rights to blocks 274 and 275 for which the highest bona fide bidders - Coscharis Allenne Ltd and Pan Ocean Oil Corporation - had offered to pay signature bonuses of $50 million and $10 million for the two blocks.

Energy Resources and Sterling Global also have till today to match the deposits paid by the bona fide winners of both blocks by paying up the balance of the amounts they deposited on Friday.

A breakdown of other winning bids and the signature bonuses they attracted is as follows:

- Block No. 228 attracted a signature bonus of $6.25 million by the winning firm, Sahara Energy Fields for which the mandatory 50 per cent deposit of $3.125 million was paid on the day of the bidding conference.

- Blocks No. 231, 234 and 239 attracted winning bids of $26.5 million, $6.5 million and $11.5 million respectively from Moni Pulo. Moni Pulo paid deposits of $13.25 million, $3.25 million and $5.75 million for all three blocks at the conference.

- Sterling Global E & P won blocks 2005 and 2006 having bid $9.5 million and $7.5 million respective for the blocks. The firm paid the requisite 50 per cent deposits of $4.75 million and $3.75 million.

- Tenoil secured block 2008 with a winning bid of $12 million and paid a deposit of $6 million.

- Blocks No. 2009 and 2010 were won by Global Energy Co. Limited which bid $11.5 million for each of the blocks. Global Energy paid the 50 per cent deposit of $5.75 million for each block.

- Block No. 240 went to the BOC JNHP Consortium which bid $10.6 million. The consortium paid $5.3 million at the bid conference as its deposit for the signature bonus.

Yorkshire Energy World Limited won blocks 258 and 295 with winning bids of $60 million and $105 million respectively, of which it deposited $30 million and $52.5 million for the blocks.

- Oilworld Limited got block 241 by offering to pay $20.102 million. The company deposited $10.051 at the bidding conference.

- Essar Exploration posted a winning bid of $37 million for block 226, and paid the 50 per cent deposit of $18.5 million.