Adedapo Adesanya
By Adedapo Adesanya
The federal government has disclosed plans to cancel most of the permits granted to marginal oil field operators in 2021 that remain non-operational.
This was disclosed by the Minister of State for Petroleum for Oil, Mr Heineken Lokpobiri, at the Nigerian Economic Summit in the nation’s capital, Abuja.
Unlike active blocks held by International Oil Companies (IOCs) like Shell and Eni, marginal fields haven’t seen any activity in the last 10 years or more and the government allows local companies to hold their licenses to operate and explore.
According to the Minister, only three of about 100 licenses granted by the now-defunct Department of Petroleum Resources (DPR), which is now the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), are operational.
Mr Lokpobiri said the government will revoke the permits once the three-year deadline for them to become operational expires.
The government plans to hold another oil-bidding round soon, the Minister said.
This is the latest development after the NUPRC in January 2022 cancelled the licenses it granted to 33 businesses for failing to meet the 45-day deadline necessary to pay the signing bonus for the fields.
Recall that the marginal oilfield bid round was announced by the former DPR in June 2020. This was eighteen years after the last bid round was carried out in 2002, and it was available to investors and indigenous oil and gas companies who were interested in taking part in Nigeria’s exploration and production industry.
Subsequently, the DPR said that it had selected 161 out of the more than 600 businesses that submitted pre-qualification applications to move on to the next and last round of the bidding process for 57 marginal oilfields around the nation.
The FG stated in March 2021 that after the procedures for acquiring these resources were finished and the winners were declared, the Ministry of Petroleum Resources was anticipated to produce $600 million from its new marginal oil reserves.
