Perform Or Lose Your License, FG Charges Marginal Field Operators

By Ijeoma Agudosi-Lagos
The federal government is coming hard on indigenous oil producers operating the marginal fields relinquished by the oil majors.

The ndigenous oil producers who won the 2003 marginal field bid round are currently account for about 2.4 percent of the current 2.5 million barrels daily oil production.

Government had licensed 24 operators during the exercise out of which only about nine are currently active contributing 2.4 per cent of the country’s daily production.

The beneficiaries faces various challenges including infrastructure deficits around the fields, lack of industry experience, high interest rates on loans; poor oil metering tools and insecurity.

It would be recalled that in 2003, twenty-four marginal fields were allocated to 31 indigenous companies as part of the marginal fields licensing round initiative, while additional four was awarded after 2003 to make it 28-fields.

The beneficiaries included Brittania-U which is the operator of a sole risk license in the Ajapa field (OML90), Platform Petroleum and New Cross Petroleum Limited in the Egbaoma field (OML 38). Waltersmith  Oil Limited & Morris Petroleum in Ibigwe field (OML 56) were also on the list.

Others are Midwestern Oil, which operates the Umusadege field (OML 56), Pillar Oil operates the Umusati/Igbuku Marginal Field located in OML 56 under a sole risk license, Frontier Oil is the operator of the Uquo field under a JV with Seven Energy, and Energia – is the operator of the Ebondo/Obodeti Marginal Field.

But government not satisfied with their performance has threatened to revoked non-performing marginal fields operators licenses by March 2015.

Mr George Osahon, Director, Department of Petroleum Resources (DPR) who issued the warning at a one-day marginal field sensitization workshop in Lagos,said that the increase in reserve and production should be the prime objective of the industry stakeholders.

Osahon said that about 28 marginal fields had been awarded since 2003 and there is need for operators to commence operation in their various fields.

According to him, Federal Government will not hesitate to revoke licenses of those non performing marginal fields’ operators which had failed in the last 10-years of awarding the contracts.

He said that unless reasonable commitments are made by the operators and ascertained by government, the authority will not hesitate to review such licenses.

The director said, “Government has been concerned about the decline in the country’s production level, which calls for urgent action.

The workshop will help marginal field operators to move ahead of the investment profile.

Osahon said that in spite of the operators’ challenges such as funding, infrastructure, insecurity, community issues, technical capability, ownership and partnership tussles they can still engage professionals to advise them on best way to commence operations.

According to him, the marginal field licenses were issued ten years ago with the proviso that holders who failed to produce within five years would have their licenses revoked.

Speaking further he noted “At the end of the first five years however, the licenses were reviewed, and the tenure extended by another five years, that extension will expire in March 2015”.

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