• Friday, March 29, 2024
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Nigeria to grow oil reserve by 100m barrels with award of marginal fields

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With 57 new oil fields awarded to winners of the 2020 marginal field bid round, Nigeria targets to grow its oil reserve by between 40 and 100 million barrels in the next couple of months, the Department of Petroleum Resources (DPR) said on Monday.

The DPR completed the 2020 Marginal Field Bid Round exercise with the award of the fields to successful indigenous investors who are now expected to expand output.

Auwalu Sarki, Director/CEO, DPR, speaking at the award ceremony in Abuja, said the award is projected to grow the reserves of the country by at least 40m barrels by increasing the various recovery factors by 5 percent among others.

He said the 57 oilfields have a production capacity of 100 million barrels.

The award is expected to stimulate employment in the country because all the awardees will recruit people; bring more revenue in form of taxes to the government and enhance growth to the Gross Domestic Product (GDP), the DPR boss said.

“Once we put in the secondary and Tertiary recovery method, technically, we will grow the reserves and increase the production of the country.

“This is a good platform for marginal fields to come in to increase and grow the reserves. Remember, we left 11 fields and over 40 million barrels fallow for 17 years. Now we have over 100 million which we want to grow within the next couple of months,” he said.

He explained that the exercise began in June 2020 and the Department received a total of 591 Expression of Interest applications. Of these, a total of 161 companies were shortlisted as Potential awardees after thorough evaluation, out of which about 50 per cent have met all conditions and therefore eligible for the award.

He also disclosed that the DPR, using lessons of the previous exercise which was conducted in 2003 has refocused and developed a strategy to ensure the awarded marginal field operators achieve early development.

He informed that the DPR will continue to follow up and guide the awardees every step of the way. According to him, a guiding template of working agreement has been drafted for joint awardees and discussions have reached an advanced stage between DPR and Leaseholders on the Farmout agreement and other technical enablers, in a bid to facilitate the attainment of first oil in record time.

“What took time in getting the farm-out agreement signed is the issue of Politically Exposed Personalities in which the IOCs needed to really check.”

“In addition, the DPR will organize a technical workshop with all awardees for guidance on the field development and operations.

“I wish to thank all our partners for believing in us and making the decision to invest in the Nigeria oil and gas industry in the wake of these economic challenges. On our part, I wish to reassure you of the commitments of this government and our drive to ensure collaboration with all stakeholders, for the sustainable development of Nigeria’s hydrocarbon resources.

The Director further assured the awardees that the DPR is solidly behind them and will support them to ensure that they get their return in investment.

Sarki said, “We are not leaving you alone, we will eliminate all bottlenecks, we will not allow the lease companies to strangulate any emerging company coming from our entry, that I promise you. You are all awardees of the federal government, I assure you that we are solidly behind you, although the leaseholders are eager to receive you.”

Some of the awardees are; AA Rano Nig ltd, Matrix Energy, Velvet Exploration Production Company, Shafa Exploration Production company Ltd, Emadeb Energy Services Ltd, Dutchess Energy, Zigma ltd among others.

Edu Inyang, Head, Basinal Assessment and Lease Administration (BALA), while giving a presentation on the Marginal Field Bid, recalled that in the 2003 exercise,24 oil fields were awarded to 231 indigenous companies.

He regretted that 17 years after the 2003 marginal field bid rounds, 11 fields were unable to achieve full production, thereby negating the objective of the exercise.

Inyang explained that the exercise was aimed at increasing indigenous participation in the upstream sector; attract investment, create jobs, increase oil and gas production volume among others.

According to him, some of the challenges that marred the 2003 exercise include the late conclusion of the farm-out agreement, poor alignment among the co-awardees, and disputes leading to litigation.

He further highlighted some challenges of the process to include; noncommitment to work programme and obligations, the poor synergy between farmee and farmor and late signing of JOA due to cooperation among equity holders within a field.

Anthony Okoroafor, a representative from Velvet Exploration Production said that the 2020 award is the first most transparent exercise. He urged DPR to assist in talking to the IOCs to allow them to produce through their facilities and also assist them in farmor agreement.