Uncertainty Trails Nigeria’s Next Marginal Field Bid Round

oil fieldAn oil field in the Niger Delta
  • Uncertainty Trails Nigeria’s Next Marginal Field Bid Round

There is palpable uncertainty over the timeframe for the country’s next marginal field bid round, as the Department of Petroleum Resources (DPR) is yet to finalise any framework to that effect.

Specifically, DPR said in a statement yesterday that it is yet to receive any directive from the Ministry of Petroleum Resources regarding opening of bids to concession 30 marginal oil fields in the country.

According to DPR, arrangement has not been concluded yet to hold any bid round later this year or early in 2018.

The Federal Government had earlier planned to organise the marginal field bid round in 2013, with several roadshows in Nigeria and abroad to attract investors, but failed to meet the set deadlines.

The agency stated: “We would like to put it on record that whereas there might be plans to conduct oil bidding rounds in the near future for purposes of expanding opportunities in the oil and gas sector of the economy in line with the government’s aspirations to boost exploration activities and to bolster the national reserves, however these exercises would only be conducted when the DPR has been given the requisite authorisation by the Minister of Petroleum Resources, to submit operational guidelines and technical frameworks with which to midwife the process.”

But DPR assured the public that once such approvals have been secured, appropriate publicity mechanism would be activated to properly apprise interested participants and investors both within Nigeria and the international community as to how the process would be managed, reminiscent of the transparency and openness that have become sacrosanct guiding principles of the current administration.

It said that though the DPR is yet to finalise any framework for a bidding round, it could however reaffirm government’s longstanding adherence to the principle of an open competitive bidding process as opposed to a discretionary process of acreage allocations that has long been discarded.

The Group Managing Director of the Nigerian National Petroleum Corporation, Dr. Maikanti Baru, had recently said that there were lots of opportunities in the marginal fields, which would soon be available for interested bidders.

“The marginal oil field lease renewal is an opportunity for your group. You will need to engage the DPR early in discussion to find out the conditions that the Federal Government is interested in. For example, the supply of gas to power plants and fertilizer plants,” Baru noted.

He urged marginal field operators to ramp up their collective production from 10 per cent of national production to 50 per cent in the next 10 years to increase the footprint of indigenous companies in the upstream sub-sector, as is the case in the downstream.

The NNPC helmsman stated that the corporation was passionate about collaborating with the indigenous producers in order to grow their capacity and participation in the exploration and production sub-sector in line with government’s local content policy.

About the Author

Samed Olukoya
CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade long experience in the global financial market. Contact Samed on Twitter: @sameolukoya

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