The Federal Government has announced the offer of 157 marginal oil fields to investors. The Department For Petroleum Resources, DPR made the announcement on Monday, June 1,2020. Although the 2020 Marginal bidding round had been on the cards of the Buhari Administration since the beginning of the year, the unexpected spread mid-February, of the covid-19 pandemic put spanner in the works.
But on Monday,DPR showed the government’s determination to get the bidding going when it issued a statement announcing the offer.
“The bid round is open to indigenous companies and investors interested in participating in the exploration and production business in Nigeria,” it said.
A marginal field, is any field that has been discovered and has been left unattended for a period of not less than 10 years, from the date of first discovery, or such field as the President may, from time to time, identify as a marginal field, according to DPR.
“A total of 57 fields located on land, swamp and shallow offshore terrains are on offer,” it said.
It said the exercise, which would be conducted electronically, would include expression of interest/registration, pre-qualification, technical and commercial bid submission and bid evaluation.
“The overall process is not expected to take longer than six months, from the date of announcement and commencement to signing of farm-out agreement with the leaseholders,” the DPR said in its guidelines for the award and operations of marginal fields in the country.
Nonetheless some controversy may yet trial the new offer as some indigenous investors and their partners whose oil licenses were revoked and added to the pool of oil blocks on offer have sued the FG and obtained injunctions stopping the government and DPR from putting their blocks up for sale.
Analysts are also not so sure that this time of uncertainty and instability in the global financial and oil markets due to covid-19 is the right time to conduct an oilfield bidding round.
Although some local investors may be quite willing to get into the oil fray given that no fresh licenses have been issued since 2003-17 years ago- still most local investors would still need to partner with foreign investors and financiers to up their chances of putting in successful bids.
So far,the foreign investors appear bearish. Still, the DPR appears upbeat about the prospects of a successful bidding round.
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