The Department of Petroleum Resources (DPR), yesterday, announced that it had concluded plans to issue award letters to successful investors in the 2020 marginal field bid round.
It explained that successful investors, who will be receiving their award letters are companies that have fully satisfied all requirements listed in the marginal field bid round guidelines, including full payment of signature bonuses within the specified time frame.
This disclosure is contained in a statement issued and signed by the Head, Public Affairs of DPR, Mr Paul Osu, noting that the award ceremony has now been officially scheduled to hold on Monday, May 31, in Abuja.
The process, which culminated in the presentation of award letters, began in June 2020 with 57 marginal oil fields on offer for investors with the objective of deepening indigenous participation in the oil and gas industry as well as adding to the country’s production and reserve.
The oil and gas regulator also stated that the marginal field bid round is geared towards providing technical and financial partnerships for investors.
The statement noted, “The Department of Petroleum Resources will continue to provide transparent regulatory oversight for the oil and gas industry to enable business and create opportunities for investors.’’
The Director of DPR, Sarki Auwalu, recently revealed that the country was expected to generate about $500 million from signature bonuses on these marginal oilfields, the first bid round since 2002.
He said DPR had narrowed the list of bidders to 161 and would mark the first time Nigeria would allow companies to pay oilfield acquisition costs in naira.
Having received the expected revenue, the Minister of State for Petroleum Resources, Timipre Sylva, in the penultimate week, revealed that the regulatory agency rescued Nigeria from a financial crisis by remitting the funds to the Federation Account Allocation Committee (FAAC) in April.
Sylva explained that since the DPR collected royalties on behalf of the federal government, it was able to fill the vacuum left by the NNPC in contributing to the federation account.
However, the minister, who did not mention the exact amount the DPR provided, said revenues from marginal field programmes were of use when the nation was in dire need of funds to share among the federating units.
He said, “I can’t say what the figure is, but the DPR has always contributed to the federation revenue, because they collect royalties, so they’ll continue to contribute. But as to filling the gap, it’ll not always be there, because NNPC has not said after not being able to contribute in May, it’ll stop entirely. NNPC has not announced it again. So, we cannot say for how long DPR is going to keep paying.’’
What you should know
Marginal fields are known oil or gas discoveries on an International Oil Company (IOC)-owned block, where there has been no activity in at least 10 consecutive years. With the agreement of the IOC, the DPR carves out a piece of land surrounding the discovery and this becomes a Marginal field.
The bid round which began on June 1, 2020, is coming about 18 years after the last similar exercise in 2003 and is open to indigenous oil & gas companies and investors interested in participating in the exploration and production business in Nigeria.