FG Realised N174 Bln from 2020 Marginal Field Bid Round

FG Realised N174 Bln from 2020 Marginal Field Bid Round

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has said that the sum of N174 billion was realised from the 2020 Marginal Field Bid Round (MFBR) programme.

The Commission Chief Executive, Mr Gbenga Komolafe, made this known on Thursday, in Abuja, at the NUPRC engagement with 2020 Marginal Field Bid Round (MFBR) awardees and leaseholders.

The engagement was for the Commission to state the policy position on the 2020 programme, to enable successful awardees to progress to the field development phase in line with the Petroleum Industry Act (PIA) 2021.

Marginal fields were conceived to entrench an indigenisation policy in the upstream sector to promote indigenous participation, increase oil and gas reserves, production, capital inflow, generate employment and build local capacity in the sector.

In a keynote address, Komolafe noted that 57 fields were identified for the 2020 bid round exercise and a total of 665 entities expressed interest. Read: First Crude Production from Marginal Fields Expected in 2022

He said that after extensive evaluation processes as laid down in the guidelines, 161 entities emerged potential awardees, while there were 247 unsuccessful bidders.

“Signature bonuses for 119 awards were fully paid, nine awards were partly paid for and 33 awards were not paid for. This resulted in various challenges inhibiting the close-out of the exercise.

“The marginal field guidelines provided for 45 days for the payment of signature bonus which has since elapsed, and we have issued a public notice to that effect as well as notified the relevant potential awardees.

“Concerted efforts are being made to ensure that the 2020 MFBR exercise is completed within the shortest possible time,’’ he noted.

The chief executive noted that the NUPRC management, on its assumption, set up a committee to look into issues surrounding the bid round and come up with strategies to resolve them.

He listed some of the issues surrounding the bid round as the formation of Special Purpose Vehicles (SPVs), equity participation, and part payments. Komolafe stated that the committee had engagements with some awardees and would progress with these meetings next week in Lagos with another set of awardees.

Furthermore, he said that the commission, through the Alternative Dispute Resolution Centre (ADRC), had offered an opportunity for co-awardees of marginal fields to resolve issues speedily and amicably.

Mr Abel Nsa, Senior Technical Adviser to the Commission Chief Executive, in a presentation entitled “Post 2020 MFBR engagement status and policy direction’’ highlighted the pre and post PIA marginal field fundamentals, concept, roadmap and development.

Under the PIA 2021, section 94 (8), a marginal field is described as a field or discovery which had been declared a marginal field prior to Jan. 1, 2021, or which had been lying fallow without activity for seven years after its discovery.

Nsa further recalled that the Petroleum Act 19 (as amended) paragraph 17 of the first schedule described marginal fields as fields not considered by license holders for development because of assumed marginal economies under prevailing conditions.

“Fields that have had an exploratory well drilled on the structure and reported as oil and gas discovery for more than 10 years.  Fields that current leaseholders consider for farm-out due to portfolio rationalisation.

According to him, prior to 2020, 30 marginal fields were awarded, which included land (13), swamp (8) and offshore (nine).

Also speaking, the Secretary and Legal Adviser of the NUPRC Board, Mrs Olayemi Anyanechi, said the programme was a policy for indigenisation, meant to develop content and competence in Nigeria, under Nigerian law.

Eligible awardees, who were in attendance, expressed satisfaction with the updates from the engagement, urging the commission to look into issues bordering on the MFBR, including SPVs process, part payment and operational issues, among others. #FG Realised N174 Bln from 2020 Marginal Field Bid Round