A Review of the Nigerian Energy Industry

BPE should hands off sale of bitumen blocks – Minister of Mines & Steel Dev.

—New guidelines for sector expected by December

Oscarline Onwuemenyi

ABUJA – The Minister of Mines and Steel Development, Arc. Mohammed Musa Sada, has told the Bureau for Public Entreprises, BPE, to stay away from the sale of bitumen blocks, pointing out that it was the exclusive preserve of the Ministry to allocate or dispense of such natural resources.

Sada who stated this on Monday at the inauguration of the Bitumen Blocks Committee, in Abuja, said the new Committee would set new rules for the general operation of the sector, as well as new framework that will lead to the bidding for the block and ultimately for the development of the bitumen resources of the nation.

“The BPE should have no hand in the sale of bitumen block; they are not government property to be sold off anyhow. The simple logic is to adopt what happens in the oil and gas industry where it is the sole mandate of the Ministry of Petroleum Resources to organize for open and transparent bids for the blocks.

“With regards to the bitumen blocks, they fall completely under the mandate of the Federal Ministry of Mines and Steel development, hence the formation of this Committee to ensure an effective and comprehensive restructuring exercise of the bidding process.”

“Nigeria has comparative advantage in bitumen resources and we can facilitate investments in the resource. Our current information is that we have over 27 billion barrels of oil equaivalent. We expect whosoever wins the bid the further develop the resources.”

“My predecessors in office had dome work in developing the bitumen resources of Nigeria. The efforts were, of course, inconclusive. We now intend to take the activities and the previous work to a logical conclusion.”

Sada stated that the new initiative was very important and in line with the Transformation Agenda of President Goodluck Jonathan, as well as the Federal Government’s efforts to attract foreign investment into the mining sector, pointing out that there was no better time to develop the bitumen resources than now.

“We are all aware of the global resurgence of interest in the development of bitumen by major national and international players. In fact, there has been a tremendous increase in the expression of interest in Nigerian mineral commodities over the last one year.”

He added that, “We are all aware of the occurrence of bitumen in parts of Southern Nigeria. This is found in belt stretching through Edo, Enugu, Lagos, Ondo, Ogun states. The occurrence was discovered in Nigeria in the year 1900 and several exploration activities has been carried out over the years by private and public institutions.

“These include the Nigerian Bitumen Corporation, Shell, Mobil, Tenneco, University of Ife Consultancy Unit, Conoco and the Federal Government of Nigeria through the Ministry of Mines and Steel Development.”

The Committee, which is headed by the Director-General of the Nigeria Geological Survey Agency (NGSA), Professor Siyan Malomo, was given until the end of the year to develop a strategy for the development of the resource, taking into cognizance the participation of both local and foreign investors.

The Minister further charged the committee to develop a framework for the new structure in the exploration of bitumen resources in the country, including the participation of new and existing ventures within the sector.

“I have high expectations from the Committee. I expect it to set the rules of the game ab initio. I expect a professional and transparent process that will lead to the bidding for the block and ultimately for the development of the bitumen resources of the nation.”

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