Opinion: How Not To Waste the Family Jewels, By Patrick O. Okigbo III
Over time, Nigeria’s oil license bid rounds have seen a decline in interest from serious investors. For instance, only 57 per cent of oil blocks offered in 2005 drew a bid; by 2007, the number dropped to 40 per cent. The fact that the minister of Petroleum Resources is empowered by law to award or revoke licenses based on his or her discretion has turned the licensing process into a channel for dispensing political favours. This has dissuaded many serious investors from participating.
The short answer is in the affirmative, especially as Nigeria is in dire economic straits and needs to unlock value from its dormant assets. However, if Nigeria’s decades-old history with licensing marginal oilfields is anything to go by, the proposed auction will be another wanton waste of the family jewels.
Before the commencement of bidding activities, Nigerians should insist on evidence of the following four key deliverables. One, a comprehensive national economic development plan and how the expected signature bonuses would be used to implement the plan. Two, a national data repository that would be used as the single source of verified data for all parties interested in the bid.
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