In a move to boost production of crude oil, most of the licenses granted to marginal oil field operators in 2023 which are inoperative will be cancelled , the Federal government has disclosed .
This comes more than 30 months after the government finished the acquisition process for these marginal fields and announced the winners.
According to Bloomberg, this was made known by Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, while speaking at the Nigeria Economic Summit currently going on in Abuja.
Lokpobiri stated that, among the approximately 100 licenses issued in 2021, only three are currently in operation. He further mentioned that the Federal government intends to revoke these permits once their three-year operating deadline expires.
This is not the first the government is cancelling such permits as the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) had in January 2022, revoked marginal oil field awarded to 33 companies for failing to meet the 45 days deadline required to pay the signature bonus for the fields
Lokpobiri has revealed the government’s intention to conduct another oil-bidding round in the near future. He pointed out that out of approximately 100 licenses issued that year, only three are currently operational, and the government plans to revoke those permits once the three-year operational deadline elapses.
Marginal fields are recognized as oil or gas discoveries within International Oil Company (IOC)-owned blocks that have seen no activity for at least a decade. With the approval of the IOC, the Federal Government delineated a portion of land surrounding these discoveries, thereby designating them as Marginal fields.
It’s worth noting that in June 2020, the Department of Petroleum Resources (DPR) initiated the 2020 marginal oilfield bid round, marking the first such round in 18 years. This bidding process was open to indigenous oil and gas firms as well as investors interested in entering the exploration and production sector in Nigeria.
Following the pre-qualification phase, the DPR shortlisted 161 successful companies out of over 600 applicants, advancing them to the final stage of the bid round for 57 marginal oilfields in the country.
In March 2021, the Federal Government announced that the Ministry of Petroleum Resources was projected to generate $600 million from the new marginal oil fields, following the completion of the acquisition process for these fields and the subsequent notification of the winners.
