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Tag: Marginal Oil Fields

  • NUPRC opens bid for 17 marginal oil fields

    NUPRC opens bid for 17 marginal oil fields

    The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) said it has begun the conduct of a fresh bid round for marginal oil fields in Nigeria.

    The NUPRC said 12 oil fields would be offered together with the five from the 2022 bid round that was put on hold due to the 2023 general elections.

    The Commission’s Chief Executive, Mr Gbenga Komolafe, said this at the Maiden Edition of the Nigeria Extractive Industries Transparency Initiative (NEITI) Policy Dialogue on Monday in Abuja.

    The NEITI House Dialogue is a platform for quarterly policy briefing by Chief Executive Officers and policy makers in the extractive industries to update the public on their activities.

    It enables them present information and data on key transparency and accountability policy reform efforts either accomplished or ongoing in their respective organisations.

    Komolafe, in his presentation, said the bid round would be conducted between 2024 and 2025.

    He stated that the Commission would conduct a comprehensive review of all awarded assets to ascertain active and idle assets in the industry.

    He assured that the process would be fair, transparent and competitive in line with Section 73(1) of the Petroleum Industry Act (PIA).

    He said it would be difficult to put a figure to the amount that would be generated from the bid round, adding, however, that it would run into billions of dollars.

    According to him, the country’s oil production is currently hovering around 1.4mbpd and 1.5mbpd.

    He said the petroleum environment prior to the PIA was chaotic, but had been changed with 25 regulations put in place by the Commission.

    He added that the sector had become predictable for investors to come in.

    Komolafe said the Commission awarded 49 gas flare sites under the gas commercialisation programme of the Federal Government, and generated N4.344 trillion revenue in 2023.

    Earlier, in his Opening Remarks, the NEITI Executive Secretary, Dr Orji Ogbonnaya Orji, said the Dialogue would host notable policy makers in Nigeria’s extractive industries and related sectors.

    Orji said it would address issues that were of interest and topical to the industry.

    He added that the policy dialogue would also get the invited policy maker to provide update or status report on the implementation of NEITI report recommendations as it concerned the agency.

    “This is with a view to deepening not just government oversight and reforms in the extractive sector, but making it inclusive of all stakeholders.

    “Selected section of company representatives, media and civil society actors will be invited to the programme live.

    “This is to demonstrate the multi-stakeholders’ nature of the Extractive Industries Transparency Initiative (EITI) process,” he said.

  • Reps quiz NUPRC over dwindling revenue in signature bonuses

    Reps quiz NUPRC over dwindling revenue in signature bonuses

    The House of Representatives on Monday quizzed the management of Nigerian Upstream Petroleum Regulatory Commission (NUPRC) over dwindling revenues accruing from Signature Bonuses.

    The Chairman, House Committee on Finance, Rep. James Faleke, discovered this at the interactive session with revenue generating agencies in Abuja

    He said the document submitted before the committee showed that the projected N251 billion revenue from Signature Bonuses in 2024 fiscal year would decline to zero by 2026.

    The lawmakers queried the commission over the revenue accrued from the sale of federation assets to Nigerian National Petroleum Corporation Limited (NNPCL).

    The commission is expected to give details of its involvement in Signature Bonuses and measures put in place to expand the monetisation of the country’s oil assets.

    Falake however summoned NNPCL management over federation assets acquired from NUPRC, with a view to ensure accountability of public funds.

    The committee also requested for supporting documents on the projected crude oil supply for 2024 to 2026, while demanding for copies of the oil audit conducted by NUPRC.

    The lawmakers also requested for details of the Commission ‘s preparedness to meet the negotiated LPG supply to Germany which was brokered by President Bola Tinubu during the 10th German-Nigerian business forum.

    Speaking earlier, NUPRC Chief Executive Officer, Mr Gbenga Komolafe said that the commission was working on the proposed LPG supply to Germany.

    The Commission, represented by Executive Commissioner on Economic Regulation and Strategic Planning, Mr Babajide Fasina said the commission was yet to get information on new oil blocs before they embarked on new bid rounds.

    Faleke however demanded for evidence of payments made by NNPCL, as well as list of assets acquired, among others.

    The committee asked NUPRC to provide explicit plans put in place to meet up with projected crude oil in 2024/2026 amidst oil theft.

    Recall in January 2022, NUPRC management said 33 companies failed to pay the required signature bonuses for the 2020 marginal field bid round within the 45-day window.

    Komolafe said this during a meeting with marginal field awardees and leaseholders.

    Marginal fields are smaller oil blocks developed by indigenous companies, and they have not been exploited in at least the last ten years.

    In May 2021, the Department of Petroleum Resources (DPR) — now NUPRC — had completed the first successful bid programme after 18 years.

    Over 600 companieshad applied  to be pre-qualified for the bid rounds of 57 marginal fields, which began on June 1, 2020.

    Speaking at the meeting, Komolafe said efforts were being made to close the bid round and that the commission would support successful awardees who had paid the required signature bonuses.

    57 fields were identified for the 2020 bid round exercise, and a total of 665 entities expressed interest. After extensive evaluation processes as laid down in the guidelines, 161 entities emerged as potential awardees,” he said.

    “Signature bonuses for 119 awards were fully paid, nine awards were partly paid for and 33 awards were not paid for. This has 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.

    “It is pertinent to inform you that concerted efforts are being made to ensure that the 2020 MFBR exercise is completed within the shortest possible time,” he said at the meeting.

  • Marginal oil fields: Another goldmine ebbing away

    Marginal oil fields: Another goldmine ebbing away

    By Kolade Omotoso

    For so long as Nigeria had crude oil as the mainstay of her economy, how well has it served Nigeria since discovery? Not so well as corruption and sabotage have seen the country and its citizens wallowing in abject poverty, infrastructural deficit and wanton corruption.

    In a bid to harness the full potentials of the natural resources Nigeria is adequately blessed with, a non-profit policy institute, the Nigeria Natural Resource Charter (NNRC) was established. This organization saddles itself with the responsibility of effectively managing natural resources for the good of all and sundry. To achieve this, the organization prescribed twelve (12) precepts which if put into use, would help in developing the natural assets latent underground to generate wealth and visible development for the teeming populace. The 12 Precepts address the issues of legal framework, transparency, licensing, taxation, local impacts, state-owned enterprises, investment, growth, public spending, private sector, extractive companies and the roles of the international community.

    Precept 1 focuses on strategy, legal framework and institutions. It seeks to ensure that resource management should secure the greatest benefit for citizens through an inclusive and comprehensive national strategy.

    Precept 3 which talks about the government encouraging efficient exploration and production operations applies here. It is expected that the government being an unbiased umpire should allocate these marginal oil fields to local oil companies that have shown capacity to develop them to productive capacity. Little has changed from the last benchmarking report of 2017 with respect to exploration, licensing and monitoring operations. Despite having marked improvements in the areas of collection and disclosure of data of interested parties, legislation has been a major impediment. The refusal of the President to accent to the PIB which houses the Petroleum Industry Administrative Bill (PIAB) means the President who doubles as the incumbent Minister of Petroleum still possesses discretionary powers to award licenses to whosoever he deems fit. This singular action cannot produce the level of competition needed to make the most of the marginal fields auction which is getting competent local companies to get licenses that would further develop our local oil industries. It is also worth noting that no bid was held during the review period. Without appropriate legislation backed regulation, future auction could still be abused.

    Theoretically, marginal oil fields are oil fields that are considered not commercially viable enough for the huge oil companies to invest in but according to the Petroleum Amendment Act, marginal fields are fields where oil discoveries have been made but left unattended to for a period of 10 years from the date of discovery. To this end, there are several fields that have been declared marginal, many of them unallocated.

    Marginal fields auction is a bidding exercise carried out by the Department of Petroleum Resources (DPR) on behalf of the government. The exercise involves only indigenous oil companies as the marginal oil fields are designed to help the indigenous oil companies grow considering the fact that they do not have the wherewithal to rub shoulders with the multinationals when it comes to full blown oil exploration in the country. The marginal oil fields comes as a due compensation which gives them a sense of belonging.

    The last marginal oil field auction took place in 2003 where 24 fields were awarded to 32 companies and that was 18 years ago which means another exercise is long overdue. The issue worth musing over is how well those companies fared on the marginal oil field, the idea of them taking over the field is to develop it to production capacity which would in turn generate revenue for the government but reports have it that very few of those fields were even developed as many were left unattended to.

    Another issue with the acquisition of these fields which are meant to be a playground for local oil players is the fact that some indigenous companies would go into the auction not with the intention of winning to develop the fields but to win and then sell to foreign investors. In short, they are only acting as proxies for their own inordinate interests.

    Now that the DPR is gearing up for another auction with 56 marginal fields from land, swamp and shallow water terrains to choose from, the government through its governing agency must do things differently to achieve optimum results. Crude oil is no longer the expensive necessity it used to be in the global market, it is now a dispensable luxury that consumers have started finding a way around. To this end, the government must make the most of opportunities to maximize revenue from this particular natural resource and that is by ensuring a thorough bidding process which compels the winner to develop the fields.

    The usual practice of a window period of 10 years before declaring a marginal field dormant and then revoking the license before putting it up for another auction should be discarded. It should not take a decade to gauge the seriousness of an investor, that is too long a period to wait seeing the unstable nature of the price of crude oil in the global market. It is a known fact that the essence of the marginal fields auction is to strengthen local content by encouraging local players but stringent measures should be put in place to ensure that only serious players are allowed on that field.

    Furthermore, to make the most from our marginal oil fields, we need to whittle down the effect of politics. Those fields are for serious and interested investors not to curry or return political favours .

    The government should as a matter of urgent importance adopt the recommendations of the BER as it was carried out by people seasoned experts and people of impeccable character since the government cannot continue to do the same thing and expect different results. If they must achieve a better result with the marginal fields auction, things must be done differently.

    The government agency in charge of organizing the auction, the Department of Petroleum Resources (DPR) has called for bids and up for grabs and allocation are 57 marginal oil fields. The DPR has lined up several statutory payments amounting to 115,000 dollars and 5million Naira respectively. All these payments are to be paid before the bidding and they are non-refundable. While all these payments are not out of place as it would weed out the weak and unserious local investors. When the stakes are high, only the strong makes a claim.

    The auction is good but it could be better if the issues militating against a successful auction are adequately addressed. With the Covid-19 pandemic that has affected global oil prices and consequently, the nation’s economy, the country is being forced into a sale of her assets to raise revenue. This could be counterproductive as prospective buyers could sense the desperation and under-price the marginal oil fields. A desperate government in dire need of funds might be forced to settle for a knockdown price.

    Another issue is the delayed passage of the PIB. In recent days, there seems to have been progress with the passage of the PIB as a draft seems to have moved from the Executive to the legislature. This is definitely a leap forward but would the Marginal Fields Auction wait for the passage and signing of the bill into law before the auction is concluded? If the auction goes ahead under the current terms, the President and Minister of Petroleum, which in this case is the person of President Buhari, would still be wielding enormous discretionary powers and the marginal fields might just be falling into the hands of people not competent enough to develop it.

    With the Covid pandemic and the delayed passage of the PIB, this might just not be a good time to have another round of marginal oil fields auction.

     

    Kolade Omotoso is a versatile writer and a public affairs analyst.

  • 57 marginal oil fields: Isoko threatens to shut down fields, gives FG ultimatum

    57 marginal oil fields: Isoko threatens to shut down fields, gives FG ultimatum

    …supports Urhobo, Ijaw, Itsekiri

    …condemns marginalization of indigenes

    …says it is injustice taken too far

    The Isoko Development Union, IDU, the umbrella body of all Isoko citizens has threatened to shut down 57 marginal oil fields in Delta State its citizens are not part of the bidding process.

    The group joined voice with its Urhobo, Ijaw and Itsekiri brothers to condemn the injustice meted to their Indigenes in the bidding process of the 57 marginal oil fields in its domain.

    Speaking at a press briefing at the weekend, President of IDU, Chief Idu Imiede condemned the marginalisation of its citizens in the bidding process which has become a recurring decimal.

    The Isoko leader said” the Isoko nation seriously frown at the marginalisation of our sons and daughters bidding for the 57 marginal oil fields in Delta State. This is most unacceptable because we have many of our indigenes who have the expertise, experience and resources to play key roles in the oil industry.

    “But for too long outsiders who are not necessarily better qualified than our people are brought into the system to buy our God given oil assets to our own detriment.

    “This time around we are not going to allow it, enough is enough of this injustice.

    We are therefore in total agreement with our brothers in the Ijaw land, Urhobo and Itsekiri people that those of us from oil producing communities should be give the right of first refusal in the bidding process. “We therefore call on the federal government to discontinue any action to the contrary.

    The Isoko people are giving the government two weeks ultimatum to make positive statements about our demand for fairness and justice. Failing which we will be constrained to shut down all oil and gas fields in Isoko land.

    We cannot to allow our people to wallow in poverty all because we are denied our birth right to benefit from our God given goldmine.

    “At this point it is pertinent to remind the government that Isoko is a second place where crude oil was discovered in commercial quantity in this country and that was at Uzere in 1958 soon after the first one at Olobiri in Bayelsa state.

    “Currently the Isoko crude oil contributes about 19% to the total output of the production quota of Delta State.

    “Isoko ethnic nation has eight oil fields namely: Uzere East, Uzere West, Oroni, Ogini, Oleh, Olomoro, Owei, Agip field at Irhi/Oleh which extends to our Isoko community in Osohwonike, Okugbu Isoko kingdom in Sagbama local area of Bayelsa state.

    “Ladies and gentlemen, it is really very painful that Isoko which has been producing oil for the past 62years to feed the whole country has been totally denied benefits of the natural resource which contributes over 90% to the foreign earnings.

    “The main reason is because we have always preferred to tow the path of peace instead of violence.

    “It is rather unfortunate that the government only compensate violence and neglect peacemakers like us.

    “It is in line with our civilised philosophy of always exploring the peace option that I in my capacity as the President General of Isoko Development Union, the umbrella body of Isoko people all over the world, led a delegation of our leaders including traditional rulers to Mr President Muhammad Buhari to articulate Isoko demand.

    We want to use this opportunity to once again express our appreciation to Mr President for his warm reception and his promise to give serious consideration to our nine point demand.

  • DPR moves on to next phase of 57 marginal oilfields bid rounds

    DPR moves on to next phase of 57 marginal oilfields bid rounds

    From receiving applications, the Department of Petroleum Resources (DPR) said the stage is now set to move on to the next stage of the of 2020 marginal oilfields bid rounds, which is the phase to do pre-qualification for the bidders.

    The Director of DPR, Mr Auwalu Sarki, while speaking on Tuesday in a television programme monitored in Lagos, disclosed that over 600 companies have applied to be prequalified for the ongoing bid rounds of 57 marginal oilfields in the country.

    Sarki said Nigeria last conducted marginal field bid rounds in 2003, stressing that the ongoing exercise had attracted widespread interest because of the transparent and credible procedures put in place by the agency.

    He said: “First I will say that we have really witnessed an increase in bidders after the extension of the deadline to June 21. There has been almost 30 per cent increase in the participation.

    “If you are making a bid or auctioning any oil field, you need to get 10 people per field really going after the field. We have 57 fields and we have over 600 companies. So we can say that we are celebrating success so far.

    “After the extension, we are moving according to schedule and now we are in the phase where we do pre-qualification for the bidders to apply. Everything is going perfectly.”

    According to him, this is good news to Nigeria and Nigerians because it shows that the country is ready for business and that there are credible companies who are interested in investing in the country.

    Sarki also disclosed that strategic programmes have been put in place by the DPR to mitigate the impact of a second wave of COVID-19 pandemic on Nigeria’s oil and gas industry.

    He said part of the strategy was to reduce the number of workers on offshore locations and construction sites, encourage decontamination, testing and working with health agencies, especially the Nigeria Centre for Disease Control.

    The DPR director said the agency would continue to ensure that companies are COVID-19 compliant and adhere to the 14-day quarantine protocols for workers.

    Sarki said for the industry to survive and be taken to the next level, stakeholders must devise ways to deal with the triple challenges posed by the coronavirus, fall in oil prices and supply glut.

    He said: “We have outlined survival kits post-COVID-19 which involves four key strategies.

    “These include rationalisation of portfolios, strategic partnerships among Nigerian companies, new business opportunities using technology to get it done and cost control and management to see how best we can strive to take the nation to the next level.

    “Then, expectations are four: Innovation and resilience, partnership and collaboration as well as industry growth and business development.

    “This is what we are sending in the message to the entire industry because we need each other to really awaken the giant in this country and make it an investors’ haven”.

    A marginal field is any field that has reserves booked and reported annually to the DPR and has remained unproduced for a period of over 10 years.

  • FG maintains silence as controversies trail 2020 marginal oil fields bid rounds

    FG maintains silence as controversies trail 2020 marginal oil fields bid rounds

    The federal government has so far maintained deafening silence, failing to address issues that have propped up since the Department of Petroleum Resources (DPR) announced the commencement of the 2020 marginal oil fields bid rounds.

    TheNewsGuru.com (TNG) reports the flag-off of the 2020 marginal oil fields bid rounds comes amidst the Nigeria’s poor financial situation, which has made the implementation of the 2020 budget a Herculean task for the President Muhammadu Buhari’s government with capital and recurrent expenditures already slashed.

    Prior to the announcement, stakeholders in the oil and gas industry have consistently urged the FG to conduct an oil bid round for the purpose of raising revenue to fund some of its critical projects.

    For the 2020 oil bid round exercise, DPR announced that a total of 57 fields located on land, swamp and shallow offshore terrains are on offer. But the implementing agency announced that the bid round exercise is open to indigenous companies and investors interested in participating in exploration and production business in Nigeria.

    Marginal fields: Itsekiri people decry alleged marginalisation in bidding process

    Meanwhile, the Itsekiri ethnic nationality in Delta State has decried what it called marginalization in the current bidding process for the 57 Marginal Fields by the DPR.

    They expressed their grievance in Ode-Ugborodo, Escravos, Warri South-West Local Government Area (LGA), of Delta, in a statement, after a peaceful protest on Monday.

    They tagged the protest “Movement for the Development of Itsekiri Oil and Gas Producing Communities’ (MDIOGPC)”.

    The statement was issued by the convener of the protest, Mr Isaac Botosan.

    The group threatened to cripple operations of the Oil and Gas companies operating in their homeland, if the Federal Government refused to halt the current biding process of the 57 marginal fields, and subsequently initiate new modalities.

    The protesters held placards with different inscriptions like: “We need our share of the marginal fields in our locality, DPR take note,” and “Competent companies owned by Itsekiris must be given first right of refusal”.

    Botosan in the statement, condemned the alleged protracted marginalisation of the Itsekiri nation, particularly in the areas of project execution, employment opportunities, infrastructure development, among others; and urged government to address the issues.

    He also urged the Federal Government to initiate new modalities where competent companies owned by Itsekiri indigenous people would be given “right of first refusal” on Fields in their homeland before considering outsiders.

    “We can no longer continue to sit and watch non-indigenes being offered Oil Mining Licenses in our homeland when we have capable Itsekiri people whose firms are qualified, but repeatedly denied such licenses,” Botosan said.

    According to him, the Itsekiri, as a law abiding ethnic nationality, committed to the sustainable peace, growth and development of the Nigerian project, understands perfectly the effect of the COVID-19 on the economy.

    “We are equally not unmindful of the teething security challenges the Federal Government is confronting headlong across the country, especially in the North East.

    “But, we are, however, constrained to ventilate our frustration regarding the brazen and worsening marginalisation, staring at our face daily by those in charge of managing affairs in the Oil and Gas Sector.

    “The marginalisation is clearly evident in a manner that the Multi-Billion Dollar Gas Revolution Industrial Park Project in Ogidigben and Deepsea Port in Warri South-West LGA, have been abandoned.

    “The age-long Omadino-Escravos Road, expected to connect the coastal communities in Warri South and Warri South-West LGAs, have remained abandoned till date,” he said.

    Botosan, therefore, urged the Federal Government to direct MDAs/IOCs to embark on large scale shore protection/sand-filling projects in Itsekiri riverine/oil producing communities.

    He also urged the government to institute a process for the facilitation of the abandoned age-long Omadino-Escravos Road.

    One of the protesters, Mrs Taye Mene, who spoke on behalf of the Itsekiri Women Omadinor-Escravos Federated Communities, said the people were suffering as a result of the consequences of oil explorations in their homeland.

    Ijaws demand ‘right of first refusal’ in marginal fields bids

    Similarly, the Ijaws in Gbaramatu Kingdom, Warri South-West, on Sunday carried out a similar protest, calling on the Federal Government to give its people right of first refusal in the bids for the marginal fields.

    Godspower Gbenekama, Spokesman of Gbaramatu Traditional Council of Chiefs, made the call on Sunday at a news conference held at Oporoza, the administrative headquarters of the Gbaramatu kingdom.

    Gbenekama who spoke on behalf of the chiefs and other sons and daughters of Gbaramatu, some of whom held placards, alleged the marginalisation of the oil-producing kingdom.

    Some of the placards reads: “FG should restart the Omadinor-Escravos road project, “Bring back our Dockyard, NIMASA”, among others.

    “We have by this medium announced our total and unequivocal objection to a bidding process that has for long excluded well-to-do Gbaramatu indigenes from the marginal fields.

    “The Federal Government should come up with modalities where competent companies owned by Gbaramatu indigenes will be given the right of first refusal on oil fields located in Gbaramatu and Warri South-West,’’ he said.

    Gbenekama was unhappy with the ongoing bidding process for the 57 marginal fields by the DPR which according to him had excluded Gbaramatu-owned companies from partaking.

    He appealed to the government to relocate to Gbaramatu the Floating Dock/Ship Building Yard originally planned to aid learning in the Nigerian Maritime University, Okerenkoko.

    Gbenekama also appealed to the Federal Government to resume work on the abandoned Omadinor-Escravos road to boost socio-economic and peaceful co-existence of Ijaws and Itsekiris.

    “We urge the Federal Government to restart the Omadinor-Escravos road project to improve the economic relations between the neighbouring Warri South and Warri South-West Local Government Areas.

    “The Federal Government should also resume work on the multi-billion dollars Gas Revolution Industrial Park in Ogidigben and Deep Seaport in Gbaramatu both in Warri South-West, among others,” he said.

    CSOs decry exclusion in Marginal Oil fields’ bid rounds

    Also, a coalition of Civil Society Organisations (CSOs) had decried their exclusion from the proposed Marginal Oil fields’ bid rounds announced by the DPR.

    The group’s protest was contained in a letter to the DPR, jointly signed by the National Coordinator, Publish What You Pay (PWYP) Nigeria, Peter Egbule; Executive Director Centre for Transparency Advocacy (CTA), Faith Nwadishi.

    Others include Executive Director, Civil Society Legislative Advocacy Centre (CISLAC), Rafsanjani Auwal Musaand, Chairman, Human and environmental Development Agenda (HEDA) Olanrewaju Suraj.

    Others are the National President, Green Alliance Nigeria (GAN) Chima Williams, Chief Executive Connected Development (CODE) Hamzat Lawal; National Coordinator, Media Initiative on Transparency in Extractive Industry (MITEI) Bassey Udo and Programmes Manager, Selemati Foundation, Rita Kigbara.

    Also, Executive Director, Enough is Enough (EiE) Nigeria, Yemi Ademolokun; Principal Lead, BudgIT Foundation, Gabriel Okeowo, Director Civic Media Lab, Akinfolarin Oluwaseun, and Programmes Officer, West African NGO Network (WANGONeT) Sandra Dike.

    The coalition said that the published bid guidelines by DPR did not involve CSOs among agencies that would monitor the exercise of the Federal Government’s planned award of 57 marginal oil fields’ licenses.

    The CSOs said that the published guidelines for the auction were fraught with provisions that might hamper the interest of genuine bidders in the oil fields and deny the country the benefits of set objectives.

    They emphasized strict adherence to globally accepted best-practices, while expressing doubts that the current exercise would bring a different result from the past, if government did not make the process more transparent.

    They, therefore, advocated the immediate inclusion of about two civil society representatives in the bidders screening team as observers to build public trust and investors’ confidence in the bid process.

    The group also sought strong legislative oversight by the National Assembly and involvement of the Nigerian Extractive Industries Transparency Initiative (NEITI) before, during and after the exercise to avoid the experiences of the past.

    “After reviewing the guidelines, and putting into perspective, past experiences and pitfalls of similar processes, we deem it important to draw your attention to some of the points that can hinder the success of the process, or limit Nigeria from deriving optimal financial and socio-economic benefits from the exercise.

    “We are prepared to play our roles as civil society in support of this very important national exercise with the understanding that it is intended and designed to deliver the overriding interest of Nigeria and Nigerians,” it said.

    The group identified licensing as one of the weakest links for value realisation from Nigeria’s petroleum industry, adding that previous exercises between 2000 and 2007 not only fell below global best practices, it failed to secure maximum value for the country’s assets.

    To deliver the expected increase in revenue and proven crude oil reserves as well as increase in daily crude oil production, the group said the government must ensure the set goals conformed to the country’s long-term planning objectives in the sector.

    According to the CSOs, previous licensing rounds in the country were not tied to any comprehensive asset development strategy or broader economic development plans.

    They added that each licensing round of objectives must align with the country’s strategy for managing natural resource base for current and future generations.

    The group also called on the government to strengthen the National Data Repository Geological system by making authenticated and certified data easily accessible to bidders to attract capable investors to the oil assets on auction.

    On the bidding process, the group urged the DPR to adhere to the published guidelines and criteria on the bid to avoid confusion and ensure due process, noting that the de-politicised criteria must be developed to support local content without compromising the sector’s development potential or returns.

    “Nigeria must resist the tendency to extend preferential treatment to companies solely because they are local and well-connected.

    “The DPR should amend the guidelines to accommodate the disclosure by all bidders of ‘sworn declaration, complete, comprehensive and accurate information on their ultimate beneficial owner(s).

    “This will show that Nigeria is fully compliant with her obligations under the EITI and Open Government Partnership (OGP) principles, transparency and a level-playing-field that will not allow ‘business as usual’ by vested interests,” they said.

    Petroleum Minister maintains silence

    Meanwhile, President Buhari, who happens to be the Minister of Petroleum, has maintained open silence so far. Apart from his mention of the 2020 marginal oil fields bid rounds during his Democracy Day speech, no words have been heard from the president.

    “For the first time in over ten years, Nigeria is conducting bidding process for 57 Marginal Oil Fields to increase revenue and increase the participation of Nigerian companies in oil and exploration and production business.

    “With sustained engagement of youths, opinion leaders and other stakeholders, we have restored peace in the Niger Delta Region and maintained our oil production levels,” Buhari stated in his Democracy Day speech.

    No repeat of past mistakes in 2020 marginal oilfield bids – DPR

    However, the DPR had said there will not be a repeat of past mistakes made in previous exercises in the ongoing bid rounds for 57 marginal oilfields in the country.

    Mr Auwalu Sarki, Director, DPR, gave the assurance on June 29 while delivering a keynote address at the Africa Marginal Oilfield and Independent Producers Webinar Conference.

    Sarki said the last bid round conducted in 2003 was fraught with litigations and other challenges which hampered the development of some of the awarded 24 marginal oilfields to the detriment of the nation.

    He was optimistic that the current exercise which was at the evaluation stage, would not encounter similar issues because of the robust and credible processes put in place by the government.

    The DPR boss said: “We have learnt from mistakes made in the past and have come up with workable solutions to ensure that the objective of the development of our marginal fields is achieved.

    “This time around, our awardees will be credible investors with technical and financial capability.

    “There is also the Post-General Award Conditions. This deals with transfer of interest post award. It means awardees cannot transfer more than 49 per cent interest to another party post-award.

    “It also include termination of rights of interest holder which gives the minister power to withdraw the interest of a party who fails to meet its obligations in terms of joint awardees.”

    Sarki further said the conditions protected the interest of all investors, saying that any disagreement arising among awardees and their partners post-award would first be referred to the Nigerian Oil and Gas Alternative Dispute Resolution Centre in DPR.

    He noted that this would reduce the years spent in courts over disputes which usually led to non-performance of the marginal fields, saying that such awards would henceforth be withdrawn by the government.

    “We believe that these steps will bring about a sustainable development of our marginal fields,” the director said.

    He added that the objective of the 2020 marginal field bid round was to deepen the participation of indigenous companies in the upstream segment and provide opportunities for technical and financial partnerships for investors.

    According to him, the existing 16 marginal oilfields contribute two per cent to the national gas reserves and their operations have brought peace and development to host communities in the Niger Delta.

    TNG reports a marginal field is any field that has reserves booked and reported annually to the DPR and has remained undeveloped for a period of over 10 years.

  • 57 marginal fields: Group threatens to cripple oil operations in Itsekiri land

    The Itsekiri ethnic nationality in Delta State has decried what it called its marginalisation in the current bidding process for the 57 Marginal Fields by the Department of Petroleum Resources (DPR).

    They expressed their grievance in Ode-Ugborodo, Escravos, Warri South-West Local Government Area (LGA), of Delta, in a statement, after a peaceful protest on Monday.

    They tagged the protest “Movement for the Development of Itsekiri Oil and Gas Producing Communities’ (MDIOGPC)”.

    The statement was issued by the convener of the protest, Mr Isaac Botosan.

    The group threatened to cripple operations of the Oil and Gas companies operating in their homeland, if the Federal Government refused to halt the current biding process of the 57 marginal fields, and subsequently initiate new modalities.

    The protesters held placards with different inscriptions like: “We need our share of the marginal fields in our locality, DPR take note,” and “Competent companies owned by Itsekiris must be given first right of refusal”.

    Botosan in the statement, condemned the alleged protracted marginalisation of the Itsekiri nation, particularly in the areas of project execution, employment opportunities, infrastructure development, among others; and urged government to address the issues.

    He also urged the Federal Government to initiate new modalities where competent companies owned by Itsekiri indigenous people would be given “right of first refusal” on Fields in their homeland before considering outsiders.

    “We can no longer continue to sit and watch non-indigenes being offered Oil Mining Licenses in our homeland when we have capable Itsekiri people whose firms are qualified, but repeatedly denied such licenses,” Botosan said.

    According to him, the Itsekiri, as a law abiding ethnic nationality, committed to the sustainable peace, growth and development of the Nigerian project, understands perfectly the effect of the COVID-19 on the economy.

    “We are equally not unmindful of the teething security challenges the Federal Government is confronting headlong across the country, especially in the North East.

    “But, we are, however, constrained to ventilate our frustration regarding the brazen and worsening marginalisation, staring at our face daily by those in charge of managing affairs in the Oil and Gas Sector.

    “The marginalisation is clearly evident in a manner that the Multi-Billion Dollar Gas Revolution Industrial Park Project in Ogidigben and Deepsea Port in Warri South-West LGA, have been abandoned.

    “The age-long Omadino-Escravos Road, expected to connect the coastal communities in Warri South and Warri South-West LGAs, have remained abandoned till date,” he said.

    Botosan, therefore, urged the Federal Government to direct MDAs/IOCs to embark on large scale shore protection/sand-filling projects in Itsekiri riverine/oil producing communities.

    He also urged the government to institute a process for the facilitation of the abandoned age-long Omadino-Escravos Road.

    One of the protesters, Mrs Taye Mene, who spoke on behalf of the Itsekiri Women Omadinor-Escravos Federated Communities, said the people were suffering as a result of the consequences of oil explorations in their homeland.

    The Ijaws in Gbaramatu Kingdom, Warri South-West, on Sunday carried out a similar protest, calling on the Federal Government to give its people right of first refusal in the bids for the marginal fields.