Yemisi Izuora
The Department of Petroleum Resources (DPR), has laid before indigenous oil companies about 57 oil fields as the federal government officially launches Marginal Fields bid round.
Marginal fields are smaller oil blocks that are typically developed by indigenous companies. The oil bid round is open to indigenous companies and investors, the DPR said. The fields on offer are on land, swamp and the shallow offshore.
From the date of announcement, the agency said the process should not take longer than six months. Should winning companies not be able to demonstrate progress on an awarded field within 60 months, the Ministry of Petroleum Resources has the authority to cancel the farm-out agreement.
The concluding phase will see the signing of farm-out agreements with leaseholders. According to the released guidelines effective from June 2020, potential investors willing to participate in the 2020 Marginal Fields bid round can now submit their application.
Previously, Nigeria had revoked the licences so these fields could go into the new licensing round – the first marginal field round since 2002 – which the country hopes will boost oil output and bring in much-needed revenues from fees associated with the licences.
According to the 23-pages guidelines released by the Department of Petroleum Resources (DPR), the exercise which will be conducted electronically involves five stages such as Expression of Interest/Registration, Prequalification, Technical and Commercial bid submission and Bid evaluation.
For potential investors, there are at least 57 Marginal Fields located on land, swamp and shallow water terrains in the bid basket, including 11 fields, the licences for which were revoked in early April 2020.
The Marginal Fields bid round is expected to take a maximum of six months after the official announcement of kick-off while bidding forms will be provided by the Department of Petroleum Resources (DPR).
The application process which is expected to give local players the best opportunity to participate in Nigeria’s energy sector shall attract non-refundable chargeable fees as follows: Application fee of N2 million per field, Bid Processing Fee of N3 million per field, Data prying fee of $15,000 per field, Data Leasing fee of $25,000 per field, Competent Persons Report of $50,000 and $25,000 for Fields Specific Report.
All application fees and processing fees are expected to be paid into the Treasury Single Account (TSA) while Signature Bonuses are expected to be paid into the Federation Account.
Also, fees for data leasing, data prying, Competent Persons Report (CPR) and Field Specific Report should be paid into the National Data Repository (NDR) account for repayment.
According to the approved guidelines, applicants must show evidence of technical and managerial capability and must also demonstrate the ability to fully meet the objective of undertaking expeditious and efficient development of a Marginal Field.
However, a court ruling in Lagos may have blocked governments efforts to revoke two oilfield licences, court documents seen by Reuters showed, a move that could compromise a full licensing round for marginal fields which the government is aiming to launch.
Marginal fields are smaller oil blocks that are typically developed by indigenous companies. Nigeria had revoked the licences so these fields could go into the new licensing round – the first marginal field round since 2002 – which the country hopes will boost oil output and bring in much-needed revenues from fees associated with the licences.
The Ororo field, OML 95, and the Dawes Island Marginal Oil Field, formerly called OML 54, were among 11 licences revoked by the Department of Petroleum Resources in April.
All 11 were set to be included in a total of 56 fields in the marginal field licensing round.
Two different judges in Lagos granted decisions on May 27 that halt the inclusion of the two fields in any licensing round, the court documents seen by Reuters showed.
Potential legal challenges relating to the other licences revoked in April mean that all of the 11 licences could potentially be left out of the round, two sources familiar with the matter said.
The DPR said it could not comment on a matter that was ongoing before the court. The Ministry of Petroleum Resources did not immediately comment on the rulings.
Owena Oil and Gas Ltd, said in its lawsuit that the DPR revoked its OML 95 licence “without recourse to the plaintiff,” court documents seen by Reuters showed. Eurafric Energy Ltd. challenged the revocation of Dawes Island and said it had spent money developing the asset, the court documents showed.
Owena Oil and Eurafric Energy were not immediately reachable for comment.
Federal government said last month it would delay major licensing rounds due to coronavirus disruptions, more than halving its projected revenue from signature bonuses to 350 billion naira ($972.22 million) from 939 billion naira originally expected.
But it planned to accelerate the licensing rounds for marginal fields as there has not been a major licensing round since 2005.
But the spokesman of the DPR, Paul Osu said there was no truth in a report that the process will be held down by court pronouncement involving the Ororo field, OML 95, and the Dawes Island Marginal Oil Field, formerly called OML 54, which were among 11 licences revoked by the DPR in April.
He said that it was wrong to assume that nullification of action of government on few fields by court would truncate an entire exercise. All 11 were set to be included in a total of 56 fields in the marginal field licensing round.
Federal government said last month it would delay major licencing rounds due to coronavirus disruptions, more than halving its projected revenue from signature bonuses to N350 billion ($972.22 million) from N939 billion originally expected.