By Adedapo Adesanya
About N203.91 billion was raked in by the federal government from the sale of 57 marginal oilfields to 49 investors, who received their licences on Tuesday in Abuja.
Nigerian authorities auctioned the oil facilities to investors in 2020 and it was the first in a long time.
In 1999, the central government awarded 30 marginal fields to investors but only 17 are currently working with 17 not operational, causing the country not to meet its crude oil production targets.
Pursuant to the provisions of the Petroleum Industry Act 2021, successful awardees were challenged to begin oil searches from the fields in earnest to boost the country’s crude oil production.
In his address at the event, the Chief Executive Officer, Nigerian Upstream Petroleum Regulatory Commission, Mr Gbenga Komolafe, stated that one of the major tasks inherited by the NUPRC upon its inauguration last year was the need to conclude the 2020 bid round.
“Consequently, we pursued the matter frontally and are delighted to inform you that the exercise which commenced in June 2020 is being concluded today,” he stated.
Mr Komolafe explained that historically, the marginal fields award initiative began in 1999 and was borne out of the need to entrench the indigenisation policy of government in the upstream sector of the oil and gas industry and build local content capacity.
He said, “Besides, the initiative was also targeted at creating employment opportunities and encouraging increased capital inflow to the sector.
“Since its inception, a total of 30 fields have been awarded, with 17 currently producing. A breakdown of the allocation of the fields to indigenous operators is as follows: two fields awarded in 1999, 24 in 2003/2004, one each in 2006 and 2007, and two in 2010.”
He added, “Ten years after, in 2020, 57 fields were put up for bidding. Again, it is noteworthy that the 2020 marginal field bid round exercise in respect of which PPLs are being issued today has attracted government revenue of about N200 billion and $7 million (N2.91 billion at an official exchange rate of N415.64/$).”
With the conclusion of the round, Nigeria will be hoping to boost production to meet its crude oil production quota approved by a record deal from the Organisation of the Petroleum Exporting Countries and allies (OPEC+).
Meanwhile, the NUPRC in its presentation at the event, stated that the passage of the Petroleum Industry Act had brought an end to the era of marginal field awards.
Section 94(9) of the Act stated that “No new marginal field shall be declared under this Act”.
The agency stated that the Minister of Petroleum Resources shall now award PPL on undeveloped fields following an open, fair, transparent, competitive, and non-discriminatory bidding process in line with Sections 73 and 74 of the Act.
It urged the new investors to hit the ground running in developing their awarded assets in line with industry best practices.
Dipo Olowookere