The Director, Department of Petroleum Resources, Mr. Osten Olorunshola, has said that the next bid round for the marginal fields would take not more than seven months before the award of licences.
This, he said, would be a breakaway from the past where the bid round took up to 18 months before conclusion.
Speaking during the inauguration of NOGintelligence, a weekly online newsletter for the oil and gas industry recently in Lagos, Olorunshola said the process of the bid round would be fast-tracked for awardees to get approvals on time for early development programmes and productions.
Notwithstanding the plan to shorten the licensing period, the DPR boss said the agency would ensure that the integrity of the bid round was not compromised, adding that utmost openness and transparency would be the guiding principles.
He said adequate measures had been taken so that the next bid round would be able to correct some of the shortcomings and deficiencies of the past ones.
According to Olorunshola, the next bid round is better designed to take care of many issues that may arise after the award of some of the marginal fields to their operators.
Delivering a paper titled ‘Marginal Fields Development in Nigeria: A Review of Policy, Regulation, Activities and Future Outlook’, noted that technical partnership, which had dragged many fields into litigation rather than production, was being tackled.
He said, “We are looking at how to address this issue which has made it difficult for most fields to come on stream. Rather than putting up development programme for production, most of them are busy fighting one another in law court. Majority are now at Ikeja High Court bringing litigations against one another.
“We think that most of these operators and their technical partners are nothing but strange bed fellows. Their marriages are what can be described as marriage of convenience. So, we believe before they come to us at all, they should go and marry themselves first.”
Olorunshola said it was disheartening to know that only nine out of the 30 marginal fields awarded in 2003 had been brought on stream by their operators, most of them citing technical itches from partners.
Besides, he said the agency was also addressing the issue of financing by considering making the marginal field projects more bankable.
“We are looking at ensuring the bankability of these projects. Because most of these fields are low in reserves, we think those fields that are contiguous should be brought together to make them more bankable.
“This is necessary because no financial institution or bank would want to put down its money where it feels the rate of return on investment and net present value is not reassuring. So, we are going to make it possible for the operators to be able to access fund from the banks,” he said
He said the reputation of the marginal field programme was also to be enhanced by ensuring that those who were performing were given concessions or incentive to get more fields while those not performing were made to relinquish their assets.