Bitumen Concession: FG Engages PwC as Transaction Adviser, to Launch Request for Qualification June 15

Kasim Sumaina

As the country commences the process of local bitumen production, the federal government through the ministry of Mines and Steel Development has announced that it will on June 15, 2022 launch request for qualification of delineated Nigerian bitumen blocks to potential local and international investors.

Subsequently, the government has engaged Price Waterhouse Coopers (PwC) to act as its Transaction Advisory and Program Manager for the bidding process. 

The Minister of Mines and Steel Development, Mr. Olamilekan Adegbite, in his remarks at a press conference in Abuja stressed that the development of bitumen will lead to import substitution, local content development and increase value addition of the mining industry to the domestic economy, thereby creating jobs and generating revenue for government.

Adegbite, revealed that there have been two previous attempts at concessioning Nigeria’s bitumen blocks, stating: “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 & Exploitation Company of Nigeria Limited, BEE ON) to live up to the development agreement signed.

“In 2008, another round of bitumen bidding exercise was conducted which led to the delineation of the bitumen resources areas into three large blocks A,B and C were advertised for Expression of Interest, which resulted in the pre-qualification of nine companies.”

He further said, “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.”

According to the Adegbite, Subsequently, the Ministry of Mines and Steel Development issued a letter of award on 11th November, 2021 to PricewaterhouseCoopers to act as its Transaction Advisor and Program Manager for the concessioning of bitumen blocks to potential investors.

Continuing, he noted that the cost of road construction in the country would ultimately go down with the local production of bitumen.

Adegbite revealed that the country was endowed with high grade bitumen which was easy to mine due to its proximity to the surface.

He however assured prospective investors of the huge local demand for the mineral noting that 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.