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We followed due process to issue marginal field award, NUPRC insist

We followed due process to issue marginal field award, NUPRC insist

Nigerian Upstream Regulatory Commission (NUPRC) has said it followed established regulations in marginal oil fields award. The regulator said this while refuting a report that the Commission failed to adhere to its own regulations while implementing the 2020/2021 marginal fields’ award.

In a statement signed by Oliade Shonola, head public affairs department of the commission on Wednesday, it said that as a regulatory body governed by laws under the Petroleum Industry Act of 2021, the Commission neither awarded marginal fields to entities that did not participate in the 2020 marginal bid round nor awarded a field to any company that did not meet the obligation of paying the statutory signature bonus.

“To correct the misrepresentation and the impression it could create in the minds of unsuspecting members of the public, the Commission would like to explain the process, which represents the true situation concerning the 2020 bid exercise,” Shonola said in the statement.

“The 2020 marginal field bid exercise was started by the now defunct Department of Petroleum Resources (DPR) following Presidential Approval obtained to conduct the exercise. The bid exercise was launched on June 1, 2020, and a total of 57 marginal fields were made available for bidding through a transparent online electronic bidding system.”

He noted that of the number of companies that indicated an interest in the bid exercise by submitting their applications within the deadline set for that purpose, 540 companies were pre-qualified in line with the procedure set out in the Bid Guidelines. Ultimately, 482 out of the 540 companies pre-qualified submitted bids for the various fields on offer.

Read also: Dangote Refinery: It will be a shame if we can’t supply crude oil—NUPRC

Shinola added that at the end of the exercise and in line with existing government policy to encourage as many qualified Nigerian companies to participate in the upstream business, 161 entities from the 482 pre-qualified bids were offered marginal fields and given a deadline to make signature bonus payment.

“A number of these entities were offered fields on a joint basis. The Commission, upon inception, had to embark on extensive stakeholder engagements with the successful bidders to resolve the many issues arising from the policy of jointly awarding some of the fields to several awardees. These engagements were held in both Lagos and Abuja,” he said.

“In the event where those offered fields in the exercise were unable to fulfil their obligation to pay the signature bonus within the time frame specified, the Commission sought and obtained the approval of The Presidency to re-award those not paid for to other entities who participated in the bid exercise but who were not offered any fields during the initial stage. These later awards were premised on the condition that considered companies present clear evidence of both financial and technical capability.

“At the end of the exercise, a total of fifty-five (55) fields were successfully awarded and paid for. Other than the provisional award letters issued to qualified bidders (which contain the terms and conditions of the award including the signature bonus payable), in all cases, final letters of award were only issued upon payment of 100% of the signature bonus by or on behalf of the awardee.

“As the upstream oil and gas regulator, the NUPRC will remain transparent and predictable in its mandate to reposition the upstream sector of our economy to attract credible investors for the shared prosperity of the nation.”