By Teddy Nwanunobi
A year after 2020 marginal field bid round began with 591 companies applying to win 57 oil fields on offer, the Department of Petroleum Resources (DPR), on Monday, in Abuja, awarded marginal oil field licences that are located onshore, swamps and offshore to four indigenous oil firms, including: A.A. Rano, Shafa Exploration, Matrix Energy, and Vhelblerg Exploration.
Some other winners were: Sigmund Oil Field, Emadeb Energy, Casiva Ltd, Duchess Energy and Duport Midstream.
Valuechain reports that the bid round registration portal was launched on June 1, 2020 to ease the registration and application process, and ensure a transparent exercise.
This was even as the Department has estimated that Nigeria would produce additional 100 million barrels of crude oil from the 57 fields in the coming years.
The Director and Chief Executive Officer (CEO) of DPR, Engr. Auwalu Sarki, while speaking at the award ceremony, expressed optimism that the fields would boost Nigeria’s daily oil production capacity beyond the current three million barrels per day.
Sarki explained that after undergoing a lengthy and vigorous process, 161 companies were shortlisted as potential awardees out of which 50 per cent have met all conditions.
He noted that the Department would not abandon the companies after the award, but would work with them to ensure immediate development and attainment of first oil in record time.
“It also provided the platform for the virtual data room. It is important to state that the industry-enabled National Data Repository (NDR) provided all the requisite technical and logistics support for the successful conduct of the exercise,” Sarki said.
He said DPR would ensure that the indigenous companies face minimal challenges from the International Oil Companies (IOCs), the original lease owners for the fields.
He explained that the challenges that hindered the attainment of full development of the last marginal fields awarded 17 years ago have been considered and tackled.
He pointed out that of the 24 fields awarded in 2003, 11 fields remained undeveloped, locking in over 40 million barrels of oil.
“With the lessons of the previous exercise we want to refocus, change the approach, we have developed a strategy to ensure you (the companies) and the awarded fields achieve early development.
“The DPR will continue and guide all of you every step of the way. For instance, the guiding template for working agreement has been drafted for joint awardees and discussions have reached an advanced stage between DPR and lease holders on the farm out agreement,” he added.
Sarki expressed optimism that the development of the oil fields will stimulate job creation, because “all the awardees have to recruit people, which means more taxes and revenue to the government and at the same time it enhances the GDP because the contribution of the industry to the GDP is very low”.
He also spoke on how the awards would improve Nigeria’s oil production.
“What DPR did was evaluate various recovery factors. We saw the average recovery value that we do have now, ranges from 27 to 38. If we increased this by five percent only across, we will hit the 40 billion barrels and at the same time we will hit above three million barrels.
“We have identified 7,000 reservoirs and we are producing from about 1,700 reservoirs. We took each of the producing reservoirs to see what kind of enhanced oil recovery that we need to put in and once we put the secondary and tertiary recovery methods, technically we grow the reserves and production for the country,” he added.
Speaking on behalf of the bid winners, the Chairman of Vhelblerg Bank, Anthony Okoroafor, thanked DPR for holding a transparent bid exercise.
“It was open to everybody, there was communication established with everybody and they did their own work very well,” he stated.
He, however, urged DPR to support the winning firms by talking to IOCs to allow the operators to use their facilities, if it is the most effective option.
