*Lagos meeting with awardees holds next week
The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) said it has revoked the licences of 33 awardees who failed to pay signature bonuses for the 2020 marginal field bid round (MFBR) within the stipulated time.
NUPRC said the awards have been revoked for refusal to meet the 45-day deadline required to pay the signature bonus for the fields.
NUPRC Chief Executive, Gbenga Komolafe, made these known at a meeting with marginal field awardees and leaseholders in Abuja.
The 2020 marginal field awards unveiled last May by the defunct Department of Petroleum Resources (DPR) had 57 fields on offer with 665 companies indicating interest to acquire them.
According to him, 128 awardees have made signature bonus payments for the fields so far.
He added that the commission has raked in about N174billion from the marginal oil field bid round programme.
According to Komolafe, “The marginal field guidelines provided 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 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”.
He 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 licence holders for immediate development due to assumed marginal economics under prevailing conditions.
The chief executive noted that the NUPRC management, on its assumption, set up a committee to look into issues surrounding the bid round and come up with strategies to resolve them.
He listed some of the issues surrounding the bid round as the formation of Special Purpose Vehicles (SPVs), equity participation, and part payments.
Komolafe stated that the committee had engagements with some awardees and would progress with these meetings next week in Lagos with another set of awardees.
Furthermore, he said that the commission, through the Alternative Dispute Resolution Centre (ADRC), had offered an opportunity for co-awardees of marginal fields to resolve issues speedily and amicably.
Mr Abel Nsa, Senior Technical Adviser to the Commission Chief Executive, in a presentation entitled “Post 2020 MFBR engagement status and policy direction’’ highlighted the pre and post PIA marginal field fundamentals, concept, roadmap and development.
Under the PIA 2021, section 94 (8), a marginal field is described as a field or discovery which had been declared a marginal field prior to Jan. 1, 2021 or which had been lying fallow without activity for seven years after its discovery.
Nsa further recalled that the Petroleum Act 19 (as amended) paragraph 17 of first schedule described marginal fields as fields not considered by license holders for development because of assumed marginal economies under prevailing conditions.
“Fields that have had an exploratory well drilled on the structure and reported as oil and gas discovery for more than 10 years. Fields that current leaseholder consider for farm-out due to portfolio rationalisation.
According to him, prior to 2020, 30 marginal fields were awarded, which included land (13), swamp (8) and offshore (nine).
Also speaking, the Secretary and Legal Adviser of the NUPRC Board, Mrs Olayemi Anyanechi, said the programme was a policy for indigenisation, meant to develop content and competence in Nigeria, under Nigerian law.
Eligible awardees, who were in attendance, expressed satisfaction with the updates from the engagement, urging the commission to look into issues bordering on the MFBR, including SPVs process, part payment and operational issues, among others.
