Local indigenous oil firms including AA Rano, Petrogas, MRS, Duport Midstream, among others have received award certificates of Nigeria’s first marginal oilfield bid round since 2003 when 24 assets were put on offer.
The process, which culminated in the presentation of letters to the bid winners in Abuja by the industry regulator, started in June last year, when over 600 companies applied for 57 marginal fields spanning across land, swamp, and offshore areas.
Marginal fields are smaller oil blocks developed by indigenous companies. They are often discovered on an IOC-owned block where there has been no activity in at least the last 10 years.
Other companies which received award certificate include Genesis Technical, Twin Summit, Bono Energy, Deep Offshore Integrated, Oodua Oil, North Oils and Gas, Pierport, Metropole, Pioneer Global, Shepherd Hill, Akata, NIPCO, Aida, YY Connect, Accord Oil, Pathway Oil, Tempo Oil, Virgin Forest, among others.
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Nigeria last conducted marginal field bid rounds in 2003, with 16 of the fields now contributing just 2 percent to the national oil and gas reserves, a figure the Department of Petroleum Resources (DPR) said would be substantially boosted by the latest exercise, worth about $500 million in signature bonuses.
According to the DPR, the bid will enhance economic growth, increase Gross Domestic Product (GDP) and create employment, while with the experience garnered before now, mistakes of the past will be avoided.
Auwalu Sarki, DPR director/CEO, said the government’s desire is for the awardees to hit “first oil” in record time, adding that a technical workshop would be organised with all bid winners for guidance on-field development and operations.
Concerning how the latest marginal oil fields winners will increase Nigeria’s oil production, Sarki explained, “What DPR did was evaluate various recovery factors. We saw the average recovery value that we do have now, ranges from 27-38. If we increased this by 5 percent only across, we will hit the 40 billion barrels and at the same time we will hit above three million barrels.
“We have identified 7,000 reservoirs and we are producing from about 1,700 reservoirs.”
Sarki noted that DPR took each of the producing reservoirs to “see what kind of enhanced oil recovery that we need to put in and once we put the secondary and tertiary recovery methods, technically we grow the reserves and production for the country”.
An investor’s guide to marginal oil field acquisition prepared by the government says Nigeria has an estimated 2.3 billion barrels of crude oil reserves in over 183 fields classified as marginal. However, despite this potential, marginal fields still contribute poorly to Nigeria’s total production.
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