Nigeria offers frontier Lake Chad oil blocks as output targets rise

(Bloomberg) – Nigeria offered investors oil blocks near its northeastern border, where a conflict with Islamist insurgents has been ongoing for decades. 

Out of 50 oil blocks in the latest bidding round offered by Africa’s top crude producer, four are in the Lake Chad basin, the Nigerian Upstream Petroleum Regulatory Commission told investors on Wednesday.

The area, containing what was once one of the world’s largest bodies of water before it started shrinking, reaches into Nigeria, Chad, Niger and Cameroon. All four countries are battling jihadi groups including Boko Haram and Islamic State West Africa Province, known as Iswap, that seek to control territories and have engaged in deadly clashes.

Nigeria pumped about 1.4 MMbpd last year, NUPRC data showed. President Bola Tinubu has set a target to more than double that amount in 2030. 

The bidding aims to “grow oil and gas reserves through aggressive exploration and development efforts,” according to a prospectus for the sale. 

Still, no wells are producing in northern Nigeria. The bulk of oil blocks in the 2025 bidding round are in the Niger Delta, where the country’s drilling operations are concentrated in onshore and offshore wells.

Companies entering bids will pay bonuses of as much as $7 million per block and are allowed a maximum of two blocks, the commission said. Winners will be announced at an event in Abuja, the capital, in the coming months.