Marginal assets offer Nigeria diversification window in 2024 bid rounds

• Assets to bring in fresh $38bn in lifetime revenue

Ben Eguzozie

Nigeria is set to place a strong emphasis on marginal assets in its planned 2024 oil bid round. The assets offer the potential to boost efficiency in the sector bringing in fresh resources online and diversify the country’s exploration landscape, according to oil and gas experts.

This new conviction stems from the positive of the 2020 marginal bid round, featuring 57 fields, of which the largest 25 are expected to generate some $9 billion in investments in their first five years of operation, and a total of $38 billion in lifetime revenue.

Till date, Nigeria remains a mono-product economy. Oil is responsible for 85 percent of the West African nation’s export earnings, and accounts for 30 percent of its budget revenues.

The government is revitalising the industry by restructuring the fiscal terms, institutional frameworks and regulatory policies aimed at attracting investment and boost efficiency, with a major focus on promoting indigenous oil and gas companies to shore up local content development and value addition.

But falling back to the indigenous oil and gas players remains the only option available to the Nigerian government following a barrage of divestments by the international oil companies (IOCs) after more than half-a-century operation in the country.

The IOCs have outlined many issues responsible for their sudden Nigeria exit, such as unending government policy summersaults which hurts long-term planning, industry level oil theft, rising insecurity especially in the delta region, poor infrastructure base; whereas there are very attractive operating environments beckoning in other oil producing nations like Angola, Côte d’Ivoire, Ghana, Senegal, Sierra Leone, among several others.

Since 2021 till date, IOCs have exited from their Nigerian oil assets worth more than N20.8 trillion, according to reports.

NJ Ayuk, executive chairman of African Energy Chamber, said “improving the participation of local companies in Nigeria’s oil and gas industry will assuredly engender energy independence across the country, while upskilling the workforce and bolster local content development.

“As Nigeria moves to alleviate energy poverty through domestic petroleum products, companies like Platform Petroleum will be central for enhancing oil recovery and resource monetisation across the country,” Ayuk said, while commending the company’s expected participation at the forthcoming 2024 Africa Energy Week (AEW) in South Africa.

The Nigerian indigenous oil company chairman, Dumo Lulu-Briggs, recently announced an ambitious bid to increase Nigeria’s oil output by investing up to $1 billion in the country’s oil and gas industry.

The company is also upgrading its flow station capacity at the Egbaoma field – situated on OML 38 in the Niger Delta Basin – from 3,000 barrels of oil per day (bpd) to 10,000 bpd; and from 30 million standard cubic feet (scf) of natural gas to 60 million scf per day by 2025.

Platform Petroleum is also expected to showcase opportunities to partners and investors in Nigeria’s marginal field development while highlighting enhanced gas recovery and monetization strategies.

The Egbaoma field operated by Platform Petroleum serves as one of Nigeria’s 24 marginal fields previously farmed out to indigenous oil companies. Since first oil production, the company has carried out over nine workover operations, drilled three wells and executed two sidetracks – a testament to robust efforts to optimise the field’s production in joint partnership with oil and gas company Newcross Petroleum.