[size=14pt]Giving the Chinese a break from oil bids [/size]
By Elisha Bala-Gbogbo

The Federal Government's plans to release new acreages for bids by oil companies has continued to generate diverse reactions from the industry despite indications that Acting President Goodluck Jonathan may have halted further actions regarding a 2010 licensing round entirely.

Analysts mostly complain about the discretionary tendencies in the Federal Government's oil deals with some Chinese investors.

Emmanuel Egbogah, special adviser to the president on petroleum affairs had said two weeks ago that government was considering releasing an unspecified number of new blocks with over two billion barrels of oil in reserve.

The Federal government have two key objectives for growth in the oil sector: to raise reserves to 40 billion barrels and to raise production capacity from the existing 2.5 million barrels per day (bpd) to 4 million barrels by the end of this year.

To meet these targets, Nigeria would have to attract large-scale new investment and new players, which implies offering up new acreage. However, these targets remained elusive in spite of four licensing rounds held in the last decade - the 2000, 2005, 2006 and 2007 bid rounds.

Post amnesty bids

Although some industry players are upbeat about the possibility of a bid round this year, others are still concerned about the security situation in the Niger Delta. An amnesty deal struck with the militants have failed to progress beyond the promises of rehabilitation and re-integration of the ex-militants.

Two weeks ago, Jomo Gbomo, spokesperson of the Movement for the Emancipation of the Niger Delta (MEND) said the militant group has decided to call off its ceasefire after government's failure to continue with a planned peace talk with the group. Consequently, the group attacked the Shell Trans-Ramos pipeline, and promised to "re-visit the Trans-Ramos pipeline which we attacked in June last year after it has been repaired, as well as other oil facilities around the Niger Delta in the weeks to come." The militants had earlier attacked Chevron's Makaraba pipeline in Delta State on Friday, January 8, to re-launch their attacks on oil facilities, which started in 2006 allegedly as a quest for greater access to the oil wealth. This has significantly impacted on operational costs, and dampened investments and investor confidence to Africa's largest oil and gas producer.

"Bid rounds are okay but the only problem is if you're trying to do post amnesty and you've not basically shown anybody that you're serious about the Niger Delta, then why are you doing bid round?" asked Toyin Akinoso, oil industry analyst and publisher of the Oil and Gas Report.

"I think that this is diversionary. Not looking at the man who has the land in the Niger delta and who government have asked to lay down arms and cool down. Government is not doing what it promised but rather it is politicizing the whole process. I think government is just insensitive" he said.

"My problem basically is peace. Let's resolve this (peace) thing to some extent before you talk about bids," Mr Akinoso added. "But I think that what Mr. Egbogah did was a teaser. I'm not sure he's going to do a bid round. These government people, there's a way they do things to check if people are going to line up behind them."

But there are some who argue that the industry would be excited about a 2010 bid round because it will provide more opportunities for local oil services companies in the long term, and inject more funds for investment into an industry that has been hit by the global credit crunch.

"A lot of people look for opportunities to invest in Nigeria," said Afe Mayowa, managing director of Danvic Concept, a geoservices company. "Nigeria is a good place to invest in spite of all our problems. Nigeria is a very important part of the global oil business, so everybody will be looking forward to participate in the bid round. If there are more companies involved, the better."

Enter the Chinese

Given Nigeria's important position in the global oil market and China's growing appetite for oil, it was surprising that the Chinese did not show an earlier active interest in acquiring oil blocks in Nigeria.

But the Chinese have now made a major move, with the promise to invest about $50 billion in 23 licences, including 16 operated by Shell, Chevron and ExxonMobil, which expired last November and were up for renewal, for reserves estimated at six billion barrels according to Mr Egbogah. He also said this year's bid round will include oil licenses relinquished by Western oil majors. None of the majors concerned was willing to talk when NEXT contacted them on the matter. However, analysts insist that there must be a level playing field for all instead of adopting discretionary allocations. "If government wants to give anybody anything, let them do bid round. That has always been my take," Mr Akinoso argued. "All that talk about the Chinese looking for six billion barrels, and talking to government, is not a market place thing. It doesn't allow for transparency."

The industry is unanimous that new entrants, particularly the China National Offshore Oil Corporation (CNOOC), on whose behalf China's Foreign Minister Yang Jiechi led a high level delegation to Nigeria in January, to discuss the oil blocks deal, should participate in the bid round, if there will be any this year.

"If government have these acreages that they want to give out, if there are other people that have shown interest for them apart from the existing ones, well so be it," Isaac Arowolo said. Mr Arowolo, who is president of the Nigerian Association of Petroleum Explorationists (NAPE), added that: "If they compete and win, it's good; now that we no longer give these things out for free anymore." But the Department of Petroleum Resources, the regulator of oil and gas operations in the country and supervisor of the bid rounds, refuted insinuations of discretionary allocations in the government/Asian deals.

According to Belema Osibodu, a deputy director of Public Affairs, "The era of discretionary bid rounds is over. Government will disclose the date (for the 2010 bid round) at the appropriate time."

However, many are not convinced that this is the fact. Moreover, things are not helped by the fact that all the promises made by the Asian operators in exchange for exploration rights have not been fulfilled, especially promises of investing in some downstream infrastructure.


http://234next.com/csp/cms/sites/Next/Money/Business/5526415-147/story.csp

Perhaps, there will be a change from simply handing out oil blocks to the Chinese without bidding. That's like selling our soul's for peanuts.
The US and West should be allowed to bid against the Chinese. That's how open and transparent markets work.

Beaf:

Perhaps, there will be a change from simply handing out oil blocks to the Chinese without bidding. That's like selling our soul's for peanuts.
If the US and West should be allowed to bid against the Chinese. That's how open and transparent markets work.

I'm really apprehensive about these Chinese people.

It is good to increase our Crude Oil output but should it be at the expense of the people of the Niger Delta. Our government is so focused on oil that it is destroying the lives of the Niger delta resident. More inland Oil blocks means more pollution and environmental damage.

If only we had sensible leaders ,the first thing are supposed to do is to bring in environmental scientist to do a survey of the area and create an operations manual which will guide all pipeline construction ensuring that pipelines are constructed underground or under the swamp. These oil company cut costs and the construct most of their pipelines above ground even across people homes. These kinds of practice must stop, Nigeria has the worst Oil spill records in the world. The natural swamp grove in the Niger delta which was once home to many indigenous species has since been destroyed. Another mistakes the government is making is that the Niger Delta has a strong potential of being a tourist attraction just like the Amazon is to the Brazilians but our greed for Oil seems to have overshadowed all these other opportunities.

If i were the president of Nigeria,I will halt all Oil exploration activities and invite environmental specialists to visit the Niger delta and conduct several scientific surveys. Their mandate will be to come up with a solution that will ensure that the Niger delta residents are no longer victims of pollution and alternative ways of creating jobs for the locals .Tourism in the Niger Delta will also be on the agenda. I will build three new world class cities in the Niger Delta region and two ultramodern international airports.

I will mandate all oil companies to build their pipeline underground. This pipelines must be built underground inside concrete underground tunnels. This will prevent oil spills from affecting the soil. I know it will cost the oil companies more money to to this but that will be my stand. Anyone who cannot comply with that rule will not be issued a license. I will also put some of the annual revenue aside to build three new  refineries. The refineries will be situated far ways from residential areas and measure will be taken to ensure that waste from the refinery is recycled and deposed of properly.

I will set up a watch dog agency which will be monitoring the actions of the Oil companies. This agency will also constantly test the waters of the Niger delta for pollution and any company found to be polluting the waters of the Niger will be heavily fined. Before tourism can start we must first clean up the waters of the Niger delta. Because of the pollution which has taken place for several years ,it will probably take another two years before the water of the Niger delta will be clean. Once we have achieved this. We will build new tourism motivated cities which will feature exotic resorts, water parks, 6 star hotels ,scuba diving ,parasailing, water ski. This will create a lot of jobs in the hospitality industry for indigenes of the Niger Delta. The Niger delta will now be like the Florida of Nigeria if the master plan is adhered to.

All the above is very possible only if the people in government can do away with their greed and make up for all the wrong they have done to the people of the Niger Delta for so many decides. So president Jonathan If you are reading this I suggest you first of all address the issue of pollution in the Niger Delta before issue more licenses. You are president of the republic ,you should not allow Oil companies to dictate to you. These people need Nigeria because they are making money here.They should be begging us not us begging them.

Just take a look at the picture below,it just shows that out leaders have their brains in their azz.How can pipelines be exposed like this in the middle of a residential area.No planning because those in power have no brains!

See how Niger Deltas live while the oil magnates live in exclusive suburbs and enjoy the best lifestyle possible. Is it fair to our Nigerian brothers and sisters? Mr Jonathan i am asking you this question because you are from the Niger Delta yourself .What are you going to do about this ? Are your people going to continue living like animals while you satisfy your PDP agenda?

My Jonathan ,this is your chance not only to help your people but to show Nigerians that you are a patriotic leader. So instead of making brand new oil deals why don’t you make a plan to change these people’s living standards? And no I am not from Niger delta ,I am from Ekiti -Ondo but I am a good human being and I cannot stand by and watch my fellow country man or woman live like this. Mr Jonathan you do not have any excuse, Niger Delta blood flows through your veins, please do something about this. Change these people’s lives.

I hope these people realise that we also need to have oil reserves, to assure our future domestic energy needs are met, and can fuel industrialization.
These cretins seem to think they are in government to sell oil blocks.

Shoot2Kill:
. . .
The natural swamp grove in the Niger delta which was once home to many indigenous species has since been destroyed
. . .

Well said, EmperorOlu. The Niger Delta, indeed is Africa's largest mangrove swamp which once used to have its own floral, mammalian and fish species; a lot of which have now been wiped out and their habitats taken over by economically useless, opportunistic ones (eg water hyacynth and Nypa fruticans).
That is one hugely overlooked fact.

Build 3 new sea side cities in the Niger Delta

Create a new tourism industry in the Niger Delta

Create a nature park with containing protected species

Build new hospitals

Create a watch dog agency to monitor pollution in the region

Create a property wonderland that will bring foreign currency to the region

Create tourist packages for marine tours through the creeks and aquatic tours in form of scuba diving

Create fishing expeditions for tourists

Rehabilitate all current militants in the Niger Delta

Create a new coastal guards agency that will ensure the security of all tourists.

One of the cities created in the Niger delta should be a licensed gambling city like las vegas. Africa has no gambling city. This will generate massive income for the region. The Nigerian government will liaise with stake holders in Las Vegas and reach a deal to build to mega casino resorts in that appointed city. This will create a lot of jobs for Niger Deltas resident.

Several hospitality schools and colleges must be set up to train indigenes of the Niger Delta. Another one of the cities will focus mainly on resorts, the Nigerian leader can liaise with Walt Disney to create Africa’s first mega Disney park where kids from all over Africa can visit. This city can also contain a mini city which will be styled after Hollywood. This mini city will consist of movie sets, theatres like Hollywood in Los Angeles.

The third city will focus mostly on exclusive hotels ,technology parks(which will host Nigeria first mega web hosting companies) and automobiles fairs ,even consisting of a formula 1 track , a world class 18 hole golf course ,a world class tennis stadium , a world class basket stadium and a world class horse race track.

To make this cities successful a master plan and manual must be made which must be adhered to by all parties concerned. Our traffic regulations must be altered to meet world standards. Our road designs must change to meet world standards. A lot of careful planning must go to this ensure that it is a success.

If we want to take it further we can make plans for a new landmark which will be the landmark of Nigeria(Nigeria’s logo).Dubai built the tallest building in the world with $3 billion ,why can’t we better them and build the our own tallest building ,we can allocate $5 billion for that and Nigeria will have something they can be proud of hosting the world tallest building the world ,that will definitely put us on the map and make other people especially tourists notice us. People will want to visit Nigeria to see the building. Our government should also spend money on advertising. The PDP is just a dumb party .I don’t understand how the PDP, Nigeria’s biggest party does not have an official website and the Nigerian government has no official website. I thought Akinluyi said she is re-branding , how can she do that when she is not intelligent enough to know that the Nigerian government needs a website and a beautiful one for that matter to attract investors

You guys think fashola has done something great in Lagos , wait till someone like me becomes president, you won’t believe the way i will revive Nigeria. I have got good ideas ,i just don’t like Naija politics!

Beaf:

Well said, EmperorOlu. The Niger Delta, indeed is Africa's largest mangrove swamp which once used to have its own floral, mammalian and fish species; a lot of which have now been wiped out and their habitats taken over by economically useless, opportunistic ones (eg water hyacynth and Nypa fruticans).
That is one hugely overlooked fact.

That is true, do you know there are many environmentalists all over the world who has been writing letters to the Nigerian government for years to protect these species but they never listened.

Australia makes hundreds of millions of dollars every year from aquatic tourism alone, especially the “Greet Barrier Reef”

I mean imagine if we can invite National geographic to do a documentary on the Niger Delta, before you know it tourists will be rushing to the Niger Delta. You know westerners love nature.