After a three and a half month-long exercise, Nigeria’s Department of Petroleum Resources (DPR) has concluded this year 2020 Marginal Fields bid round, and is currently awaiting the consent of President Muhammadu Buhari who doubles as the minister of petroleum.
The bid round exercise, a local content portfolio restricted to basically local oil firms, featured 52 fields and was concluded on September 15, 2020.
Officials of DPR said it was heavily subscribed, and arguably so, the largest number of bid applications in any hydrocarbon licencing sale in Africa in close to 10 years.
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Although the Department of Petroleum Resources (DPR) did not put a specific cost to each oilfield, the regulator however said the fields have lower cost of investment of between $50 and $100 million, and risk of development compared to major capital projects.
Experts therefore predict that if the Federal Government succeeds with on its estimates, for the 57 marginal oilfields being offered to investors, it might be able to attract about $5.7billion into the economy.
Impeccable sources said the DPR had concluded the analysis of the bids in the last two weeks and it has sent the results to the Minister of State for Petroleum, Timipre Sylva, who is to deliver it to President Muhammadu Buhari.
While the round started with over 500 applications, it closed with at least 100 applications making it all the way, each delivering at least $115,000 to the Nigerian treasury in the process.
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It is expected that Nigerian will get more money when the results are announced, even as winning bidders will have to pay signature bonus before the final awards. Analysts expect some highly contested fields, like Egbolom, to attract north of $5 million as signature bonus.
Most applicants in this round were Nigerian independents who already produce crude oil and gas and are seeking to expand their portfolios. Others were Nigerian oil service contractors who now feel they should take positions in hydrocarbon acreages.
Director, DPR, Mr Auwalu Sarki, said at the Africa Marginal Oilfield and Independent Producers Webinar Conference, that to avert situations where investors are edged out of deals after securing the oilfields, the DPR activated sustainability plans for the marginal field programme.
He said the conditions put in place will protect the interest of all investors, adding that any disagreement arising among awardees and their partners post-award were first be referred to the Nigerian Oil and Gas Alternative Dispute Resolution Centre in DPR.
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Sarki said 2003 bid round was marred with flaws that resulted in many litigations and other challenges, which hampered the development of some of the awarded 24 marginal oilfields to the detriment of the nation.
By Chibisi Ohakah, Abuja
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