Marginal Oil fields On Offer

Fri, Nov 29, 2013
By publisher

Oil & Gas

The federal government has again thrown open bids for the licensing of 31 marginal oil fields as a way of encouraging indigenous participation in the oil and gas industry

By Maureen Chigbo  |  Dec. 9, 2013 @ 01:00 GMT

TWELVE years after the last bid for the licensing of marginal fields in the oil and gas sector, the federal government is providing another opportunity to increase the involvement of indigenous oil companies in the upstream sector. On Thursday, November 28, Diezani Alison-Madueke, minister of petroleum resources, flagged off the second oil marginal fields licensing round.

A total of 31 fields are on offer with 16 of them located onshore, while the remaining 15 are in the continental shelf. The last marginal fields’ bid round was held in 2001. Of the 24 fields that were allocated to 31 indigenous oil companies in that exercise, eight are already producing while the others are at various stages of development.

Alison-Madueke, who declared the bid round open at a press conference in Abuja, said it was designed to boost the participation of Nigerian indigenous companies in the upstream and to generally increase exploration and production activities in the oil and gas sector to the benefit of Nigerians and the Nigerian economy. She said the federal government was committed to transparency in the bid process and encouraged companies indicating interest in the assets to form consortia that would enable them leverage upon each other’s strengths.

“Over the next two weeks, the Department of Petroleum Resources will undertake a road show to different parts of the country about the programme. This will be followed by a three and a half-month of competitive bidding process in line with the federal government’s commitment to openness and transparency in the conduct of business activities in the country”, Alison-Madueke  said.

She said that the marginal field operators who currently account for about one percent of the nation’s crude oil production have also recorded huge discoveries in excess of 100 million barrels to the nation’s reserve base, adding that of the eight assets that have so far been divested by the IOCs, at least four are held by active marginal field operators, who have continued to demonstrate remarkable technical ability in operating significantly larger assets.

“In their operations, the companies have addressed corporate social responsibility as a critical element by providing for stakeholder participation as part of their success factors. In addition, their development strategy is in line with the nation’s Gas Flare Policy and global environmental guidelines on Green House emissions by ensuring full utilisation of their associated gas. Indeed, one of them has established a modular refinery for diesel production which is the first of its kind in the country,” Alison-Madueke said.

The minister explained that the federal government is encouraged by the modest achievements of the marginal field operators in line with the objectives of the local content policy to kick off this marginal field licensing round. On the proposed sale of the refineries, Alison-Madueke reiterated government’s stance to move away from managing major infrastructure, adding that government was going ahead with the original plan to rehabilitate the refineries so as to be able to get a premium price from their sale.

According to a press released signed by Omar Farouk Ibrahim, general manager, Media, Group Public Affairs Division, Nigerian National Petroleum Corporation, NNPC, the minister maintained that adequate room had been made in the privatisation time-table for engagement with all stakeholders to resolve all labour issues to ensure a win-win situation for all.