Society for Petroleum Engineers (SPE) Nigeria Council, has called for a review of the marginal fields bid round programme.
The Chairman of SPE Nigeria Council, Joe Nwakwe, made the disclosure during a press briefing in Lagos on Tuesday. Nwakwe was addressing the press on the forthcoming SPE Nigeria Council virtual conference titled: “Nigeria Energy Industry Transformation Summit (NEITS)” slated for August 25-27, 2020.
He said the summit will feature notable speakers drawn from across the industry to speak on Nigeria’s refining capacity, economic diversification and relevance of Nigeria’s fossil fuel in a changing global energy mix.
He said also that Minister of State for Petroleum Resources, Chief Timipre Sylva, has confirmed his attendance including the Group Managing Director, Nigeria National Petroleum Corporation (NNPC), Mallam Mele Kyari.
However, he said to ensure that the marginal bid round is successful; there is need for the entire programme to be reviewed.
According to him, “SPE welcomes the marginal bid rounds and we are supportive because it is important that assets are allocated to those who can work them. It doesn’t serve Nigeria’s interest to sit on assets. Where assets are lying fallow, it doesn’t help us employ our members, it doesn’t benefit the country as well. However, we did recommend that certain things need to be done before the bid rounds.
“We wanted a situation where the entire arrangements, both fiscal and legal, around this were reviewed. We are at a point where we think it needed to be reviewed for performance. If you remember, we have licenses out there, you need to review why those who couldn’t develop their assets could not and see if there is something you can do to the programme itself to enable this programme to become more successful. For us, we felt a major review of the programme is necessary, we felt there were certain things that need to be cleaned up so that when you now do the next bid rounds, the success rate will be much higher.
“Trying to do one right now without making those changes, we look at it and ask what the chances they will be successful are. Overall, we think is overdue, we think it is important, especially those who have developed assets, you need to supply them with more assets. The average span of an asset is 10 years, if you don’t supply them with more assets, they will run out of oil and basically close shop. We don’t want that to happen, for them to continue to be in business, one major feed stock they need is asset. So it is important we do that. I guess the review can happen, may be after the award of asset, but it is important that we go back and look at the entire programme and finetune it for better outcomes.”
He said there is apprehension about the huge cost of bidding, “but our view is that if we have the proper review of the programme, then, they can be able to gauge the appetite of the people. Remember, whatever the cost they spend will all come into their cost and it will go into the viability of the project ultimately. We should make sure we don’t just give people assets; we give them assets they can develop.”
