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Bloomberg: Nigeria May Revoke, Put Up for Bid, as Many as 10 Oil Licenses

By Julie Ziegler

Sept. 25 (Bloomberg) — Nigeria, Africa’s biggest oil producer, may revoke as many as 10 oil licenses for the Niger delta region and put them up for bid as part of a plan to increase development in the impoverished region.

Oil Minister Edmund Daukoru is reviewing recommendations to include 10 dormant oil licenses held by Royal Dutch Shell Plc, Chevron Corp., Exxon Mobil Corp. and a unit of Total SA, among others, said Tony Chukwueke, the head of the Department of Petroleum Resources. Preferential rights to those blocks might then be offered to other companies willing to invest in refineries and development, he said.

The plan is aimed at restoring production in the Niger delta, some of which has been shut for more than 10 years by civil unrest. Militant activities and other damage this year halted as much as a third of the West African nation’s production.

“The cheapest oil for Nigeria is in the delta,” Chukwueke told reporters in Lagos. The plan “brings the quickest development for the delta.”

The move comes as companies such as Shell and Chevron expand their deep-water operations, which don’t require a joint venture with the government and reduce the likelihood of militant attacks.

Companies interested in having preferential rights to the oil blocks that may be relinquished include Centrica Plc, Cnooc Ltd. and India’s Oil and Natural Gas Corp.

The bidding round is likely to take place the first week of November, Chukwueke said. About 50 oil blocks are expected to be offered, including about 25 from last year’s round, he said.

To contact the reporter on this story: Julie Ziegler in Lagos at [email protected]

Last Updated: September 25, 2006 09:20 EDT

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