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FG Revokes 33 Firms Marginal Oil Fields Over Signature Bonus

No fewer than 33 oil companies lost right to the Marginal oil fields on Thursday for failing to meet up with the 45 days deadline required to pay the signature bonus for the fields.

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) gave the hint at a meeting at a meeting with the awardees in Abuja, declaring that the marginal oil field had been revoked.

The 2020 marginal field awards which were unveiled last May by the then Department of Petroleum Resources (DPR) had 57 fields on offer with 665 companies indicating interest to acquire them.

Giving an update on the award process, the Chief Executive of Officer of NUPRC, Engr. Gbenga Komolafe said of the 161 companies shortlisted for the awards only 119 awards were fully paid for with nine awards partly paid for.

Engr. Komolafe explained that “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”.

He disclosed that N174 billion was realized from the signature bonus paid by the companies for the fields.

He noted that given the high cost capital and government’s desire to achieve first oil in the fields, the Commission was making concerted efforts “to ensure that the 2020 MFBR exercise is completed within the shortest possible time”.

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He therefore pointed out that “this engagement with Marginal Field awardees and Leaseholders is for the Commission to state the policy position on the 2020 Marginal Fields Bid Round (MFBR), to enable successful awardees progress to field development phase in line with the Petroleum Industry Act (PIA) 2021”.

While stating that no new marginal field or farm-out agreements were envisaged under the PIA, he explained that prior to the enactment of the Act, fields were classified as marginal when: they are not considered by license holders for immediate development due to assumed marginal economics under prevailing conditions.

“Similarly, those with exploratory well drilled on the structure and reported as oil and/or gas discovery and left unattended for more than 10 years.

“Fields that leaseholders consider for farm-out due to portfolio rationalization. Lastly, fields which the President may, from time to time, identify as such”.

On what would happen to the fields which signature bonuses were not paid for, he said the fields would be returned to the basket of fields available for awards.

“Accordingly for any field that is in the market, we are going to equally ensure a transparent process of getting across to new awardees. Essentially, one of the challenges that we observed in the review and post mortem exercise is that it is critical that bidders and interested bidders are able to provide proof of fund and proof of funds for field development.

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“That will be a key consideration for future awards and the Commission will do its due diligence to ensure that such presentation are genuine so that we do not experience this kind of situation again”, he added.

Engr. Komolafe stressed that the Commission was ready to ensure that disputes amongst parties were quickly resolved to ensure that the Special Purpose Vehicles (SPVs) needed to move the process forward were set up.

“Furthermore, the Commission through the Alternative Dispute Resolution Centre (ADRC) offers opportunity for co-awardees of marginal fields to resolve issues speedily and amicably”, he stated.

Source: Independent

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