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Marginal Field: NUPRC Set to Close 2020 Bid Round
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By Ikenna Omeje

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has announced plans to close out the 2020 marginal field bid round programme.
The plans which are in line with the Petroleum Industry Act 2021 (PIA) follow the successful completion of the marginal oilfield bid earlier in the year and the issuance of award letters to successful investors.
The Chief Executive Officer of NUPRC, Gbenga Komolafe, who disclosed this in a  notice on Tuesday, noted that the Commission has put in place all necessary machinery in place to deal with outstanding issues including addressing the concerns of awardees with a view to closing out matters affecting multiple awardees per asset and formation of Special Purpose Vehicles by awardees in line with the respective letters of award.
Consequently, according to NAN, he said the Commission had enjoined awardees with the indicated issues to avail themselves of the resolution mechanism provided in the overriding national interest.
He also stated that the Commission was collaborating with leaseholders to agree on transition mechanisms in line with the PIA and the aspirations of government for the marginal field bid round exercise.
Komolafe, who explained that the 45 days period for payment of signature bonus by successful awardees as stipulated by the Marginal Field Guidelines has lapsed, however, assured those who have fully paid their signature bonuses that it would ensure that all guidelines were implemented.
About six months ago, the defunct Department of Petroleum Resources (DPR), presented award letters to the winners of the 2020 marginal bid round.  At the presentation ceremony, the former DPR Director, Sarki Auwalu, said that a total of 591 firms submitted expression of interest forms, out of which 540 were pre-qualified, while 482 were bids submitted by 405 applicants.
“In the end, 161 companies were shortlisted as potential awardees, out of which 50 per cent has met all conditions and therefore eligible for awards today. We are set to ensure opportunities are extended to other deserving applicants to fill the gap.
“The DPR is not just a regulator, we are an opportunity house. We drive creativity and transformation and we use these in all of our activities. This is done in the overriding national interest,” he had said.
Some of the successful companies awarded letters, included: Matrix Energy, AA Rano, Andova Plc, Duport Midstream, Genesis Technical, Twin Summit, Bono Energy, Deep Offshore Integrated, Oodua Oil, MRS, and Petrogas.
Others are: North Oils and Gas, Pierport, Metropole, Pioneer Global, Shepherd Hill, Akata, NIPCO, Aida, YY Connect, Accord Oil, Pathway Oil, Tempo Oil and Virgin Forest, among others.
A major issue of concern about the bid round is the purported force marriage of companies, which industry players see as disingenuous.
Marginal Fields in Nigeria evolved from the Petroleum Amendment Act 1996. The Federal Government in February 2003, awarded 24 marginal field licences to 31 indigenous companies, 24 of them designated operators with seven partners. Some of the beneficiary companies include, Midwestern/Suntrust partnership, WalterSmith, Energia/Oando partnership, Pillar Oil 2, Brittania U, Platform Petroleum, and Frontier Oil.
In November 2013, 10 years after,  the Department of Petroleum Resources (DPR) announced the commencement of the 2013 Marginal Fields Licensing Round. According to the guidelines by the Department, the objectives of the 2013 bid round were to, “Grow production capacity by expanding the scope of participation in Nigeria’s Petroleum sector, through diversification of resources and inflow of investments; increase oil and gas reserves base through aggressive exploration and development effort, in particular the deeper hydrocarbon plays; provide an opportunity for portfolio rationalization; promote indigenous participation in the sector thereby fostering technological transfer; provide opportunity to gainfully engage the pool of high level technically competent Nigerians in the oil & gas sector; and promote common usage of assets/facilities to ensure optimum utilization of available capacities.” Unfortunately, the bid round did not hold as planned. However, on June 1, 2020,  the DPR flagged off another bid round, with a total of 57 fields located on land, swamp, and shallow offshore terrains on offer. Payment by interested bidders attracted non-refundable chargeable fees as follows: Application fee of N2 million per field, Bid Processing Fee of N3million per field, Data prying fee of $15,000 per field, Data Leasing fee of $25,000 per field, Competent Persons Report of $50,000 and $25,000 for Fields Specific Report.
A marginal field is any field that has been discovered and has been left unattended for a period of at least 10 years, from the date of first discovery or anyone so-called by the president of Nigeria.
The goal of marginal field program is to create opportunities for Nigerian oil and gas companies in the upstream sector,  grow the country’s oil reserves’ production, encourage economic development through revenue generation, promotion of indigenous participation in the oil and gas sector, and discouragement of the abandonment of depleting oil fields in Nigeria.

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