ABUJA, 27 August 2005 — Nigeria opened the bidding Friday in an auction of 78 oil exploration blocks in the waters of the Gulf of Guinea, the creeks of the Niger Delta and the inland basin near Lake Chad in its far northeast.

“I am delighted that this event has attracted a wide variety of oil and gas investors, ranging from the majors to the smaller independents and from such far-away countries as Malaysia, China, Korea and Europe and North America,” said Junior Oil Minister Edmund Daukoru.

About 380 foreign and Nigerian firms are participating in the licensing round either as individuals or in a consortium, the director of the Department of Petroleum Resources, Tony Chukwueke, told the opening session of the event.

Chukwueke said that the reserved prices vary with the locations of the blocks with deepwater zones going for a minimum of $50 million, those on the continental shelf $10 million and inland areas each going for a minimum of $500,000.

“Some companies have paid for one block only in which case they will bid only once and some companies have paid for four or five in which case they will bid the number of times for which they have applied and they will bid in the blocks of their choice,” he stated.

The bid program indicates that any block not sold yesterday will be put on offer again today with the bidders having equal right to participate in the second round.

Daukoru had said on Tuesday that Nigeria’s first deep water offshore oilfield will begin production next month and by next year it will help to ease supply shortages that have pushed world prices to near record levels.

Nigeria is already Africa’s biggest oil producer, with exports of around 2.5 million barrels per day, and supplies more than ten percent of the United States’ crude imports. Oil majors have made massive investments in deep offshore development and hope that within five years, when more new fields begin production, exports could pass four million barrels.

Meanwhile, Nigeria’s labor movement warned it will react quickly to protest the country’s latest fuel price hike yesterday, raising the prospect of a general strike in Africa’s biggest oil exporter as filling stations began raising prices.

“We will react to the increase instantaneously. A meeting will be swiftly convened and action will be taken thereafter,” said Nigeria Labor Congress national mobilization officer Denja Yaqub.

“We are aware that some filling stations are selling above the current official price. We are still waiting for the government ... to move,” he told AFP.

This week President Olusegun Obasanjo’s government effectively gave the go-ahead to the latest stage in a deeply unpopular plan to deregulate petrol and diesel prices.

The state fuel price regulator announced on Wednesday that price rises were inevitable, but the government has yet to formally confirm if it has cut or abandoned its subsidy. In Abuja, the Nigerian political capital, some filling stations had increased the pump price from 55 naira (41 cents) to around 70 (52.6 cents) per liter of petrol, motorists said. Most filling stations in Lagos, Nigeria’s economic capital, and Kano, the largest city in the northern, had shut their doors yesterday morning and the few that were open sold petrol at between 65 and 75 naira a litre, residents said.

Long queues have formed in front of active service stations, causing traffic jams in some parts of Lagos and some commuters were forced to walk many miles to work. Nigeria’s unions and the bulk of public opinion oppose deregulation and over the past five years have held five general strikes, paralyzing the economic life of Nigeria’s teeming cities and forcing government to continue a policy of subsidizing fuel.

Any strike action in Nigeria now could provoke violent unrest and will unsettle international energy markets, which are fearful that protesting trade unionists could disrupt crude oil exports at a time when supply fears have already pushed world prices to record highs.

The state oil monopoly says it can longer afford to import expensive refined fuels and sell them at subsidized prices and Obasanjo argues that a deregulated market, in which private firms could import fuel and pay to refurbish Nigeria’s decrepit refineries, is the best way to ensure supply.