NIGERIA 2005 BID ROUND Keynote Address by Edmund M. Daukoru Presidential Adviser on on Petroleum & Energy, Nigeria 2005 Bid Round Promotion Road Shows Port Harcourt, London, Houston, Singapore 24 th th March, 4 th th,, 7 th th & 12 th th April 2005
Programme for the Road Shows DAY ONE Registration and Coffee Keynote Address Questions & Answers Interactive Technical Sessions Bid Process/Block Details/Local Content/Fiscal Terms Nigeria Petroleum Regulations Companies Exhibiting Data: Landmark/Schlumberger/PGS/Veritas/Mabon DAY TWO London & Houston only One-One meetings between the Nigerian delegation & executives of E&P companies and investors
Acreage Distribution 4 OPL605 OPL606 OPL602 OPL603 OPL604 OPL607 OPL601 OPL609 OPL610 OPL611 OPL612 OPL613 OPL615 OPL616 OPL617 OPL618 OPL619 OPL623 OPL620 OPL621 OPL622 OPL608 OPL614 8 OPL712 OPL713 OPL724 OPL714 OPL725 OPL703 OPL715 OPL726 OPL704 OPL716 OPL727 OPL705 OPL717 OPL728 OPL706 OPL718 OPL729 OPL736 12 OPL707 OPL719 OPL730 OPL737 OPL708 OPL720 OPL731 OPL738 OPL702 OPL701 OPL709 OPL710 OPL711 OPL721 OPL722 OPL723 OPL732 OPL733 OPL734 OPL739 OPL740 OPL741 OPL735 OPL742 16 OPL624 OPL625 OPL746 OPL801 OPL802 OPL743 OPL744 OPL745 OPL626 OPL627 OPL628 OPL803 OPL804 OPL805 6 10 Deep Offshore OPL301 OPL302 OML113 OPL312 OPL317 OPL303 OPL304 OPL305 OPL306 OPL307 OPL310 OPL313 OPL319 OPL325 OPL327 OPL328 OPL329 OPL330 OPL331 OPL334 OPL333 4000 OPL335 3000 OPL336 OPL311 OPL314 OPL321 OPL318 OPL337 OPL338 OPL320 OPL332 OPL315 OPL454 OPL474 OPL501 OPL503 OPL504 OPL308 OML103 OML95 OPL507 OPL511 OPL274 OML40 OPL204 OML49 OPL502 OPL505 OPL508 OPL512 OML96 OML98 OML111 OML41 OML125 OML57 OPL240 OPL239 OML42 OML91 OML90 OML43 OML64 OML108 OML120 OML89 OML45 OML109 OPL281 OML121 OPL211 OPL287 OML46 OPL506 OPL509 OPL513 OPL202 OPL205 OML34 OML62 OML35 OML4 OML38 OML65 OML30 OPL279 OPL201 OPL812 OPL806 OPL807 OPL808 OPL809 OPL810 OPL811 OPL510 OPL819 OPL820 OPL203 OPL206 OPL275 OPL283 OPL514 OPL515 OML26 OML61 OML28 OPL282 OPL458 OML32 OML54 OPL248 OML63 OML36 OML88 OPL322 OML118 OML122 OML59 OPL263 OML33 OML29 OPL233 OPL213 OML66 OPL471 OML86 OPL324 OPL249 OPL229 OPL289 OPL286 OML85 OPL214 OPL215 OPL326 OPL250 OPL288 OML83 OPL238 OPL226 OPL339 OPL341 OPL342 OPL343 OPL345 OPL323 2000 OPL241 200 OPL209 1000 OML110 OPL340 OPL251OPL252 OPL242 OPL344 OPL253 OPL254 OPL255 OPL260 OPL346 OPL261OPL262 OPL264 OPL265 OPL227 OML79 OPL216 OPL244 OPL266 OPL267 OPL217 OPL245 OPL256 OPL218 OPL135 OPL280 OML60 OML27 OPL516 OPL517 OPL838 OPL901 OPL915 OPL228 OML124 OML20 OPL277 OML21 OML58 OML22 OML23 OML25 OML16 OML53 OML17 OML24 OML18 OML55 OPL285 OPL278 OPL831 OPL839 OPL902 OPL914 OPL907 OPL467 OML72 OPL905 OPL910 OPL207 OPL208 OPL234 OML11 OML51 OML52 OML117 OML99 OPL284 OPL832 OPL840 OPL908 OPL903 OPL911 OPL825 OPL906 OPL833 OPL841 OPL904 OPL909 OPL912 OPL826 OPL834 OPL842 OPL827 OPL835 OPL843 OPL821 OPL828 OPL836 OPL822 OPL829 OPL837 OPL913 Anambra Basin OPL235 OML112 OML70 OML116 OPL225 OPL90 OML119 OML104 OML100 OPL219 OPL257 OPL246 OPL916 OPL917 OPL220 OPL221 OPL222 OPL247 OPL258 OPL223 OPL236 OML13 OPL231 OML69 OML68 OPL290 OML102 OPL452 OML114 OPL276 OML67 OML123 OML115 OPL813 OPL823 OPL830 Niger Delta OPL814 OPL824 OPL815 OPL816 OPL817 OPL818 Benue Basin Chad Basin FEDERAL REPUBLIC OF NIGERIA MINISTRYOF PETROLEUM RESOURCES DEPARTMENT OF PETROLEUM RESOURCES BLOCKS FOR 2005 LICENSING ROUND National Boundary State Boundary Blocks on Offer Allocated Blocks Open Blocks Joint Development Zone 0-200m 200-1000m 1000-2000m 2000-3000m 3000-4000m 4000m above 100 0 100 200 Kilometers 60 0 60 120 Miles N OPL268 OPL269 OPL270 OPL271 OPL272 OPL273 OPL259 Joint Development Zone Projection: Geographic, Minna Datum 4 8 12 Daimler Geographics, (234) 08033228622 16
2005 Bid Round Major Thrusts Pursue/realise national producability targets and oil reserve base to support them. Expand opportunities for gas development. Attract new international players and continue to encourage the traditional players. Attempt to reverse the migration of oil and gas exploration from the Delta towards the Deepwater Provide opportunity for strategic downstream projects to become viable through access to upstream. Implement a viable and comprehensive Local Content strategy. Use the opportunity of the 2005 bid round to reinforce Nigeria s commitment to transparency and the principles of EITI.
2005 Bid Round Commercial Improvement Measures Reduce the block size in the deepwater inline with sizes in other deepwater basins around the world (2500 to 1250 sq km) Introduce the option for Government to collect its full entitlements in kind. Introduce a Royalty element (Production Charge) in deepwater. Introduce a ceiling (maximum 80% of production) on cost oil recovery in the PSC to provide Government with early revenue.
Revenue Comparison 2000 vrs 2005 PSC Revenue $bln 1.2.8 2000 PSC.4 Contractor Profit Government Profit Tax Royalty 1.2 1200 1000.8.4 800 600 400 2005 PSC (Roy only) 200.8.4 0 2005 PSC (Roy+ Cost Oil Ceiling) 01 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
Opportunity will be given to two Groups of Strategic Partners to get started Entities awarded strategic downstream projects (Refineries, IPPs, GtL, Petrochemicals etc.) which are unable to attain commercial viability due to lack of integration with upstream. Local Content Vehicles, including local entrepreneurs, that will be charged with implementing the local content policy of Government.
The Bid Process has Four main stages Zonation - The available acreage is zoned by terrain and maturation targeting the the different spectrum of investors majors, independents, local operators, downstream operators, local content providers. Registration of Bidders Enrols companies in blocks/zones of interest. Companies provide all required technical, financial and legal information. Companies can apply either as strategic partners, operators, or both and pay the prescribed fees. Technical Evaluation Qualifies and assigns participation to strategic partners and makes these public in interactive sessions with the bidders. Also analyse and qualify operators, who will participate in the commercial bidding conference, in interactive sessions. Commercial Bidding Conference The objective is to obtain a fair value for the State and only operators participate on the basis of established parameters via an automated process, and to award the blocks on the day of bidding.
2005 Bid Round Acreage is in Six Zones Zones Deep Offshore 12 Continental Shelf 6 Onshore 6 Anambra 9 Benue 16 Number of Blocks Prospectivity High Local Content Downstream Projects Indigenous Operators Independents Remarks Majors X X X High - Moderate X X X X High - Moderate X X X X Moderate - Low X X X X X Low ZONATION NIGERIA 2005 BID ROUND Participation X X Block size reduced from 2500 m 3 to 1250 m 3. 50% relinguishment obligations of Snepco 212, Conocco 211, Does not include 3 Blocks recently withdrawn from ChevTex and Elf Does not include 7 Blocks recently withdrawn from Shell and Elf Does not include OPL 915 & 916 recented allocated to Orient Petroleum Includes blocks awarded to Snepco, Elf and Chevron as part of the 1991 Bid Round Chad 12 Low X X Does not include blocks operated by NAPIMS Bida and Sokoto basins are not included because spec data is yet available.
2005 Bid Round Bid Parameters & Weights The Commercial Bids shall be based on 4 parameters: Signature Bonus (Weight 40%) The maximum is scored by bids that are twice the minimum or more. Bids are then evaluated at percentage over the minimum. Cost Oil Ceiling (Weight 20%) The maximum is scored by bids that specify 70% or below. Bids are then evaluated at percentage below 80% Local Content (Weight 20%) The percentage of the work programme commitment to score the minimum is 30%. Bids are scored according to the percentage of work commitment prorated below 30%. Work Commitment (Weight 20%) - The maximum is scored by bids that are twice the minimum. Bids are then evaluated at percentage over the minimum. All equity in each block that is available for bidding shall be publicly announced together with the names of the companies and equity allocated to local content vehicles. The maximum equity that can be allocated to local content vehicles shall be 10%. The Bid Parameters may be subject to modifications as a result of feedback received in the course of this exercise. All modifications shall be published well in advance of the Commercial Bidding Conference.
2005 Bid Round - Schedule Jan Feb Mar Apr May Jun Jul Aug Sep 1 Strategy 2 Presidential Clearance 3 4 News Media Invitations to (Local) Investors Public Briefing (PAPE, GMD, Perm Sec, DPR) 28/2 7-8/3 11/3 5 6 Launch 2005 Bid Round - Abuja Open 2005 Bid Round Website & Registration / Submission of Technical Bids 8 Roadshow - London 7 Roadshow - Houston 9 Roadshow - Singapore 10/3 22/3 4-5/4 7-8/4 12/4 10 Close of Registration /Technichal Bids 11 Annouce Qualified Bidders 29/5 1/7 12 Commercial Bidding 1-2/8 13 PSC Signings 31/8
2005 Bid Round Quality Control & Advice Brazilian and Norway Department of Petroleum Resources invited to provide quality control and advice on process. International industry consultants to provide support international industry input. Invitation the UK and US Department of Energy to provide international assurances. Consultation with local industry experts to tune the process to a workable package.
2005 Bid Round Bid Committee Management Committee Overall management and directional responsibility PAPE Chairman GMD NNPC Perm Sec Petroleum SAP Dir. DPR Technical Committee Technical and commercial evaluation, process implementation Reports to Management Committee Dir. DPR Chairman TA to PAPE DPR AD BA/LA DPR AD Accounts Legal Adviser MPR/DPR Legal Adviser, NNPC DPR O/C Lease Administration DPR Assistant Chief Petroleum Engineer DPR Assistant Chief Geologist