Several of the big names in the oil industry failed to turn up at the auction of oil blocks that the Nigerian government undertook yesterday. The outgoing Nigerian government put up for auction nearly 45 oil exploration licenses on Friday, but managed to attract only the small companies and that too for approximately half the total number of blocks. Despite having been courted in advance, several Western oil corporations decided to stay away from the bid, deterred by the political uncertainty and rampant violence in the country. The current government is to vacate office in the favor of a new government, which will step in on 29 May. The investors were worried by the fact that the contracts might not stand in the long term. The timing of the auction is surprising indeed, given that the government will vacate its offices in three weeks. A Nigerian court had passed an order, a day before, asking the government not to sell two of the oil exploration sites and the fact that government has gone ahead is bound to raise some concerns. Majority of the bids were submitted by domestic oil companies. The few foreign bidders were virtual unknowns. Amongst the 11 deep offshore blocks, only two were bought by Yorkshire Energy World – a small UK firm. Of the 11 blocks on the continental shelf, seven were claimed. 11 inland blocks, in areas that are not considered very prospective, received no bids at all. The process also suffered from lack of transparency. Ten investors, mostly belonging to China and India, were granted preferential rights on 20 blocks in return for a promise to invest in the Nigerian infrastructure. These firms include: CNOOC (China), CNPC (China), ONGC Mittal (India), KNOC (Korea), Repsol (Spain) and Centrica (Britain). Analysts say that the decision to grant priority rights to some companies undermined the whole reason of auction and compelled many Western companies to stay away from the entire process. Another reason for lack of foreign interest could be the violence that grips the entire Niger Delta and shows no signs of abating. This month alone, nearly 30 foreigners have been abducted for ransom in the region. Even though there was an evident lack of interest, analysts believe that it could have been worse. Now it only remains to be seen whether President Olusegun Obasanjo, pushes ahead and finalises the deals with successful bidders. This would give him only 18 days to finalize the deals which were six to nine months in the making. Image Read