FG soon to open bids for new marginal oil fields
… Drafts PIB goes to N’Assembly June
From LOUIS IBA in Houston, USA
Friday May 04, 2012
Nigeria is to open up its marginal oil field acreages for prospective investors by the end of this month, government officials said on Thursday. The new oil leases, according to the Department of Petroleum Resources (DPR), would specifically be open for bids by indigenous oil and gas firms, while firms with foreign interests are exempted.
Director of the DPR, Mr. Osten Olorunsola, addressing a gathering of investors at the Offshore Technology Conference (OTC) in Houston, Texas, USA said through the new field, the government hoped to deepen the participation of local firms in the industry in line with the local content Act.
He however lamented the decline in Nigeria’s crude oil and gas reserves in the last three years saying the government was deeply worried.
“Nigeria’s oil and gas reserves has been on the decline in the three years and this has never happened since 1956,” he said. “This is not acceptable to the government and the industry has to think of how to turn things up again – and for the better,” he added.
He said because of the challenge of low volume of crude oil discovery in some of the marginal fields, greater care has been taken to ensure that fields placed for bids in the new bid round would all have hydrocarbons in commercially viable volume. The DPR regulates the oil and gas industry.
Olorunsola said, at present, only eight out of the 29 marginal fields awarded were in operation and lamented the trend as inimical to the industry and government effort to grow daily production capacity. He said the reason most of the projects did not come on stream was that they were not bankable and had low volume of hydrocarbons.
“We will open a new bid round for marginal oil fields in a matter of weeks,” Olorunsola said. “No one will get a marginal field not bankable. Any marginal field that goes for bid will have seven to eight million barrels capacity,” he added.
The DPR boss said local oil firms participating in the marginal field development projects had to overcome the challenge of “technology limitations, inability to access funds and increasing cost of hiring the requisite manpower, goods and services” to deliver on targets and deadlines.