Some experts in the oil and gas industry have advised the Federal Government to ensure proper implementation of the Petroleum Industry Act (PIA), and transparency in future marginal fields licensing bids.
The experts gave the advice in seperate interviews with the Business Intelligence (TBI Africa) in Lagos on Tuesday against the backdrop of the just concluded 2020/2021 marginal fields bid.
Mr Ayodele Oni, Partner, Broomfield Law Practice, said that the just concluded 2020/2021 bid was a brilliant idea by the government to raise funds.
Oni alleged that the exercise was conducted in secrecy, and that many people complained that the process was not transparent.
He, however, said there were some positives in the sense that a number of bidders were able to come up with funds to buy the assets and there were newer and better rules.
“Other than those, the defunct Department of Petroleum (DPR) did not do a great job,” he said.
On the success of the bid, he said apart from the government raising funds through the exercise, it involved more indigenous players and had the potential to increase production.
He, however, said the exercise brought together strange bedfellows, and that it lacked sufficient transparency.
Oni identified other challenges to include claims of corruption, inordinate delays and the list of preferred bidders, which was never issued publicly.
He said the owners of the marginal fields would now be independent of head lessors and have their own Petroleum Mining Lease (PMLs) under the PIA.
“Also, we expect a more transparent process in future Marginal Field Licensing Bid Round.
“The powers of the minister have been reduced with better checks and balances.
“The PIA should be properly implemented and transparency should be entrenched in the next bid round,” he said.
Similarly, Mr Joe Nwakwue, an oil and gas consultant, said it was too soon to make an informed assessment of the just concluded 2020/2021 marginal fields licensing bid.
Nwakwue noted that from the detailed study of prior exercises, awarding assets to multiple parties posed lots of challenges.
He said one was constrained to observe the rather high signature bonuses paid, noting that it might make it difficult for the awardees to raise funds for field development.
Nwakwue, who is also the former Chairman, Society of Petroleum Engineers (SPE), Nigerian Council, said completing the award process in such an uncertain environment was clearly a plus but challenges of funding and technical capacity persisted.
“Awards to multiple parties except where they jointly bid should be avoided.
“We also need to be very clear on the objective of the licensing round; are we raising money or given blocks to parties that have what it takes to develop and monetise the assets,” he said.
