FG earns N203bn from 57 oilfields, pushes for crude drill | Dailytrust

FG earns N203bn from 57 oilfields, pushes for crude drill

Minister of State Petroleum Resources, Timipre Sylva
Minister of State Petroleum Resources, Timipre Sylva

Following a declaration of N203 billion earned from the bid processes and issuance of Petroleum Prospecting Licence (PPL) for 57 marginal oilfields, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) is now pushing awardees to swiftly explore the fields and begin crude oil production in at most six years.

With a historic feat of the issuance of PPL for the 57 oilfields to the awardees in Abuja on Tuesday, NUPRC completed a process for the 2020 marginal oilfields bid round after two years.

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With the issuance of the licences, the winners of the awarded oilfields can now move to site for preliminary prospecting activities.

The NUPRC at the ceremony said about N200bn was raked in from the 57 oilfields to the coffers of the federal government, with another $7 million (N2.905bn) in signature bonuses and others, totalling N203bn.

According to the Minister of State for Petroleum Resources, Timipre Sylva, in his keynote address at the ceremony, the federal government has issued 87 marginal oilfields in the last 23 years.

Sylva said the first time a PPL was issued for a marginal oilfield was in 1999 when the government issued two licences.

He said, “Prior to this award, 13 fields had been awarded on land, eight fields in swamp and nine fields offshore, leading to a cumulative of 30 marginal fields so far awarded in Nigeria.

“It is worthy of note to state here that this present award process saw 57 fields offered and over 70 per cent of them have their signature bonuses fully paid. This indeed is a testament to the increasing interest in our petroleum operations.”

He noted that the issuance of the PPL was part of the implementation of the PIA, adding that, “This is a moment that calls for celebration of the achievements of this government in the oil and gas sector of the economy.”

To the awardees, he charged them on best practices, saying, “As you develop your assets with the Special Purpose Vehicles (SPVs), ensure that good oilfield practice is employed, environmental considerations and community stakeholders’ management are not neglected.”

The 57 marginal oilfields are located onshore and in swamps of the Niger Delta, with all the awardees being local oil companies, thereby increasing the local content position for Nigeria.

The local firms comprising Suntrust Oil, Energia Ltd, Matrix Energy, Ardova Oil and Mainland Oil were among the over 100 companies that got the licence with a six-year timeline to develop the fields and produce oil.

Successful firms will proceed to obtain an Oil Mining Lease (OML) from the government to officially produce oil from the fields they have developed for a period stipulated by the PIA 2021. 

Currently, Nigeria produces an average of 1.2m barrels of oil per day, which is short of the 2022 budget benchmark of 1.88m barrels per day and 1.77m per day OPEC quota.

Therefore, if these 57 oilfields are quickly developed, Nigeria’s oil production output could rise significantly.

Sylva noted that, “Indeed, this will boost activities in the oil and gas sector, add to our production output and create additional employment opportunities.”

The Chief Executive Officer of NUPRC, Engr Gbenga Komolafe, in his remarks at the ceremony, gave the breakdown of the 87 marginal oilfield licences in Nigeria.

He said, “Since its inception, a total of 30 fields have been awarded, with 17 currently producing. A breakdown of the allocation of the fields to indigenous operators is as follows: two fields awarded in 1999; 24 in 2003/2004; one each in 2006 and 2007 and two in 2010. 10 years after, in 2020, 57 fields were put up for bidding.”

Komolafe said, “Again, it is noteworthy that the 2020 Marginal Field Bid Round exercise in respect of which PPLs are being issued today has attracted government revenue of about N200bn and $7m.”

Of the 57 fields, 41 fields have been fully paid for with 37 PPLs issued, stated NUPRC.

In his comments, the CEO of Matrix Energy Limited, Mr Abdulkabir Aliu, one of the awardees, assured of his company’s commitment to the process.

He said, “We are very satisfied with the entire process since it started in 2020.”

Also at the event, the minister and NUPRC announced the unveiling of the template and procedure guide for the Host Communities Development Trust (HCDT) for commencement of implementation of the provisions of Section 235 of the PIA.

The initiative gives assurance to the investors that they can go about their oil prospecting without hindrance from the host communities.

 

By Sunday M. Ogwu & Simon E. Sunday

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