Nigeria has remained in the eye of the storm since the award of an Oil Prospecting Licence (OPL 245) to Malabu Oil & Gas Limited, exposed the level of corruption that takes place in the award of oil blocks.
A report conducted by the Natural Resource Governance Institute (NRGI) in 2017, has noted that the weakest link in the nation’s oil and gas industry, especially in terms of value addition, is in the area of licensing.
According to the report, only 30% of the previously allocated oilfields (oil blocks) have reached commercial production.
The oilfields are performing below expectations because the awards are caught up in several court cases that question the objectivity of the licence award process. Regarded as Africa’s richest oilfield, OPL 245 and some other licences, to many experts, remained in controversy because personal interests were regularly prioritized above the nation’s economic growth anytime oil licences are awarded.
With such developments, the wrong people are left in control of the nation’s key revenue sources even when they are without the needed technical and financial capacities. From the Petroleum Act of 1969, to the Petroleum Industry Governance Bill (PIGB), awaiting President Muhammadu Buhari’s assent, there have been different practices for the award of licences for oil exploration.
These various methods ultimately end up putting Nigeria on a steep learning curve with limited experience on commercial competitive auction systems and limitations in the allocation of licences for oil blocks.
CREDIT: ENERGY MIX REPORT
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