The Federal Government of Nigeria plans to revoke most of the licenses granted to marginal oil field operators in 2021 which have remained non-operational.
This comes over 30 months after the Federal government completed the acquisition procedures of these marginal fields and the subsequent notification of the winners.
Heineken Lokpobiri, the minister of state for petroleum resources (oil), reportedly stated as much while addressing the Nigeria Economic Summit that is presently taking place in Abuja, according to Bloomberg.
Only three of the roughly 100 licenses that were awarded in 2021, according to Lokpobiri, are currently in use. He also stated that the federal government will cancel these permits after the three-year period that allows them to do so ends.
The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) had canceled marginal oil fields issued to 33 businesses in January 2022 for failing to meet the 45-day deadline necessary to pay the signing bonus for the fields. This is not the first time the government has withdrawn such permits.
The government intends to organize another round of oil bidding shortly, according to Lokpobiri.
“Only three of about 100 licenses granted in that year are operational. The government will revoke the permits once the three-year deadline for them to become operational expires. The government plans to hold another oil-bidding round soon.” He said.
What you should
On a block held by the International Oil Company (IOC), marginal fields are known oil or gas discoveries where there hasn’t been any activity in the last ten years or more. The Federal Government cleared a portion of land around the discovery and designated it as a marginal field with the IOC’s approval.
Recall that the 2020 marginal oilfield bid round was announced by the Department of Petroleum Resources (DPR) in June 2020. This was eighteen years after the last bid round, and it was available to investors and indigenous oil and gas companies who were interested in taking part in Nigeria’s exploration and production industry.
Subsequently, the DPR said that it had selected 161 out of the more than 600 businesses that submitted pre-qualification applications to move on to the next and last round of the bidding process for 57 marginal oilfields around the nation.
The Federal Government stated in March 2021 that after the procedures for acquiring these resources were finished and the winners were declared, the Ministry of Petroleum Resources was anticipated to produce $600 million from its new marginal oil reserves.
