Nigeria awards 57 marginal oilfield licences to new investors

BY CHISOM NWATU

The Federal Government of Nigeria on Tuesday awarded 57 marginal oilfield licences to new investors who won the marginal oilfield bid which started two years ago, the Nigerian Upstream Regulatory Commission (NUPRC) said.

The winners of the bid rounds included Matrix Energy, SunTrust Oil, PetroGas Energy, Genesis Hydrocarbons, Samora Oil & Gas, Ardova, Terra Energy and Mainland Energy, Energia, Bono, Calm Marine, Virgin Forest, Tempo, Deep Offshore, North Oil, Shepherd Oil, Hilltop Global, Duport, among others.

The award of the Petroleum Prospecting Licences (PPL) of the 57 oilfields means that the coast is now clear for the winners of the awarded oilfields to move to site for preliminary prospecting activities, according to NUPRC officials.

Timipre Sylva, Minister of State for Petroleum Resources, at the event where the awardees were given their licences, described the bid rounds as a giant milestone for the current administration, saying that about 70 percent of the entire bid winners had fully paid up.

According to Timipre, the roadmap of the marginal field awards began with two fields awarded in 1999, adding that prior to the award, 13 fields had been awarded on land, eight fields in swamp, and nine fields offshore, leading to a cumulative of 30 marginal fields so far awarded in Nigeria.

Research shows that 13 out of the 30 marginal fields awarded since 1999 are not producing crude oil, as only 17 of the fields are currently meeting the target of crude oil production.

“It is worthy of note to state here that this present award process saw 57 fields offered and over 70 percent of them have their signature bonuses fully paid. This indeed is a testament to the increasing interest in our petroleum operations,” Sylva said.

He told the awardees of marginal oil field licences that their assets are going to be fully governed by the provisions of the Petroleum Industry Act (PIA) 2021.

As such, each successful field will be issued a Petroleum Prospecting Licence (PPL) in line with the PIA, which is totally different from previous practice where the marginal field owners had no licences.

According to the minister, this new development marks the beginning of a new era for those in the oil and gas sector. He urged the awardees of the PPL to take full advantage of the opportunities being presented to exploit, develop, and bring the assets to productive use.

“As you develop your assets with the special purpose vehicles (SPVs), ensure that good oilfield practice is employed, environmental considerations and community stakeholders’ management are not neglected,” he said.

“It is my strong belief that the awardees would take advantage of the current attractive oil prices to bring these fields into full production within a short period in line with Mr. President’s aspiration to increase production, grow reserves, and reduce the cost of production,” he said.

He assured the awardees that the NUPRC would provide every necessary support to ease and facilitate seamless upstream petroleum operations in line with the objectives and provisions of the PIA.

NUPRC also used the event to unveil the Template and Procedure Guide for the Host Communities’ Development Trust (HCDT) for commencement of implementation of the provisions of Section 235 of the Petroleum Industry Act (PIA) 2021. The unveiling of the template on host communities’ fund administration was a major development for oil-producing areas of the Niger Delta who are expected to benefit from the 3 percent operating expenses of oil companies in the area.

Gbenga Komolafe, CEO NUPRC, said in his remarks that the commission was faced with several constraints during the course of the exercise which has now been conquered.

Some of the constraints or challenges he listed include the COVID-19 interruption, partial payment of signature bonuses by some of the awardees, and the unwillingness of co-awardees to cooperate in forming SPVs for field development.

The process which began in 2020 had been bogged down by bureaucratic challenges, implying that the actual drilling for oil had yet to effectively take off after a long time, although 161 companies were eventually shortlisted to advance to the final stage from 591 entities that applied for pre-qualification.