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UPDATE 3-Nigeria minister sees oil licensing round this year

Published 10/14/2010, 01:20 PM
Updated 10/14/2010, 01:24 PM

* Oil reforms to be passed this year

* Licensing round for marginal fields still on track

* Nigeria to keep production stable

(Adds analyst comment)

By Muriel Boselli

VIENNA, Oct 14 (Reuters) - Nigerian Oil Minister Deziani Allison-Madueke said on Thursday a planned licensing round of marginal oil blocks and the passage of wide-ranging legislation to overhaul the energy sector will take place this year.

The Petroleum Industry Bill (PIB) will re-write Nigeria's decades-old relationship with its foreign oil partners, altering everything from the fiscal framework for offshore oil projects to the involvement of indigenous firms in the sector.

Allison-Madueke has repeatedly said the passage of the bill is imminent but it has been subject to numerous revisions and debate. Oil executives have said billions of dollars of potential investment is on hold amid the uncertainty.

"The oil licensing rounds will take place in Nigeria before the end of the year. The energy bill will be passed well before the end of this year," Allison-Madueke told reporters after an OPEC meeting in Vienna.

She said the bill will "ensure Nigeria begins to be known as a gas-producing country as well as an oil-producing country" and that concessions had been made to meet the concerns of the country's existing partners.

"We have taken on board 100-120 amendments to this legislation ... so we are trying to ensure the concerns of all stakeholders are taken on board ... But of course it will not be possible to please all the people all the time," she said.

Analysts were sceptical that the legislation would pass so quickly and questioned whether an oil licensing round would be successful without clarity over the regulatory environment.

"It is still possible that the bill could be passed this year, but this looks increasingly problematic ahead of the general elections," said Samir Gadio, emerging markets strategist at Standard Bank.

"Given that the PIB would include a local content clause, it remains to be seen to what extent a new oil licensing round potentially involving foreign companies could be successful until there is more clarity," he said.

Allison-Madueke said Nigeria's oil production was running at around 1.9 million barrels per day and that Nigeria would do nothing to disrupt current market stability, which she hoped would continue well into next year.

An amnesty with militants in the Niger Delta, the heartland of Africa's biggest oil and gas producer, has enabled oil firms to repair infrastructure damaged by years of sabotage and the country's oil output has started to recover.

"Nigeria has gone through a very bad period in the past few years ... we are now in the business of recovery which to some extent explains the increase in production," she said.

"Once we have taken care of the integrity issues... we will achieve a certain level of stability in these figures and that will be kept in line more or less with the OPEC targets." (For more Reuters Africa coverage and to have your say on the top issues, visit: http://af.reuters.com/) (Additional reporting by Joe Brock in London; Writing by Nick Tattersall, editing by Anthony Barker)

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