Nigeria set to launch Request For Qualification on bitumen concession
Story from Abah ADAH, Abuja
In the coming days, the Federal Goverment of Nigeria will commence collation of Requests for Qualification (RFP) for the concession of bitumen blocks as part of the ongoing efforts to develop the country’s rich bitumen reserves for economic growth.
Minister of Mines and Steel Development, Arc. Olamilekan Adegbite, made this known at a press conference on Concession of Delineated Bitumen Blocks in Abuja, Monday.
He said, “In continuation of our efforts to create awareness, the ministry in collaboration with PricewaterhouseCoopers, will embark on a sensitisation workshop and Investor Conference, which is scheduled to hold soon.
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“The event will include a media launch and a technical working session. The workshop will give the ministry the chance to pitch the Bitumen Investment opportunity to potential local and international investors both in person and virtually. The session will aid in the dissemination of information in order to facilitate and market the investment opportunity.
“Following the media launch, a technical working session will be held to answer any project-related queries. The Request for Qualification will be launched on 15th June, 2022.”
Explaining the importance of the move, the Minister said the concession option was being pursued in fulfilment of Mr President’s mandate to the ministry to be a Frontline instrument of its diversification policy.
“The Nigerian bitumen deposit is ranked sixth in the world in terms of reserve size. We have a total bitumen reserve size of 42.74 billion metric tonnes, which has remained unexploited for years. This creates a huge opportunity for domestic bitumen production to replace the country’s reliance on imported bitumen.
“Nigeria’s population is projected to reach 400 million in 2050, up from the present estimate of 203 million, given the present population growth rate of 2.5 percent. The World Bank projects that Nigeria’s current urbanisation rate of 52% will increase by 4% annually.
“Furthermore, 90 percent of goods, such as food and building materials, are transported by road to meet the demands of this rising population. This will increase demand for road infrastructure and put additional strain on the current road network, resulting in higher demand for asphalt for construction and maintenance. Bitumen is a crucial component of asphalt that is used in road construction.
“Nigeria currently has 200,000 km of road networks with only 60,000 km worth of road paved. This considerable road infrastructure deficit presents an inherent demand for bitumen. Hence, the development of Bitumen will lead to import substitution, local content development and increased value addition of the mining industry to the domestic economy, thereby creating jobs and generating revenue for government,” Adegbite explained.
He said there had been two previous attempts at concession of Nigeria’s bitumen blocks, such that in 2002, two blocks (now 307B and 307C) were concessioned.
“However, in 2005, we revoked their licenses due to the failure of the concessionaires (NISSAND and Bitumen Exploration and Exploitation Company of Nigeria Limited, BEECON) to live up to the development agreement signed,” he said.
Explaining further, the Minister said, “in 2008, another round of bitumen bidding exercise was conducted which led to the delineation of the bitumen resource areas into three large blocks A, B and C. Blocks A and C were advertised for Expression of Interest, which resulted in the pre-qualification of nine companies.
“To ensure that Nigeria’s bitumen resources are fully harnessed for industrial and infrastructural development, I constituted a nine-member Ministerial Bitumen Development Committee on 31 January 2020. The Committee carried out an inventory of internal existing infrastructure; compiled available geological information; re-established contact with previous interested companies and developed a framework for transparent allocation of the Bitumen resources.
“An important part of the Committee’s recommendations was to finalise the process of engaging a Transaction Advisor to ensure the concession process is open, transparent and in accordance with global best practices as enshrined in the Nigerian Mineral and Mining Act, 2007. The Bureau of Public Procurement, issued a notification of no-objection on 16th June, 2021.
“Subsequently, the ministry issued a letter of award on 11th November, 2021 to PricewaterhouseCoopers to act as its Transaction Advisor and Programme Manager for the concession of bitumen blocks to potential investors”.
