If the Federal Government succeeds with its on-going bid rounds for the 57 marginal oilfields being offered to investors, it might be able to attract about $5.7billion into the economy.
Although the Department of Petroleum Resources (DPR) did not put a specific cost to each oilfield, the regulator however said the fields have lower cost of investment of between $50 and $100 million, and risk of development compared to major capital projects.
If it successfully gets investors to stake the maximum on the oil fields, the 57 fields may earn Nigeria additional $5.7billion, an income higher than the loans the Federal Government sought from the Bretton Woods institutions within the last few months to address the effects of the coronavirus pandemic.
While awaiting fresh World Bank loans, the recent Senate’s approval of President Muhammadu Buhari’s $5.513 billion loan request bumped Nigeria’s external debt profile to $33.18 billion.
The DPR however noted that the bid rounds are real and not just a money-making venture for the Federal Government without encouraging production.
“If we want to raise funds, we could have asked the NNPC to divest from some assets to raise money. We need serious investors and that is why we are not imposing high costs on the forms; it has taken 17 years to get to this point,” said the Director, DPR, Auwalu Sarki.
To avert situations where investors are edged out of deals after securing the oilfields, the DPR said it has activated sustainability plans for the marginal field programme.
Sarki, while delivering a keynote address at the Africa Marginal Oilfield and Independent Producers Webinar Conference, said the conditions put in place will protect the interest of all investors, adding 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.
Sarki said the last bid round conducted in 2003 was fraught with litigation and other challenges, which hampered the development of some of the awarded 24 marginal oilfields to the detriment of the nation.