The Department of Petroleum Resources (DPR) on Monday announced the commencement of the 2020 marginal field bid round. This bid round is coming 18 years after the last bid round in 2002 and is open to indigenous oil & gas companies and investors interested in participating in the exploration and production business in Nigeria. Marginal fields are known oil or gas discoveries on an IOC-owned block and where there has been no activity in at least the last 10 years. With the agreement of the IOC, the DPR carves-out a piece of land surrounding the discovery and this becomes a Marginal field. On this occasion, there are 57 marginal fields available for bidding, including 11 fields revoked by the DPR.
The exercise would be conducted electronically and would include expression of interest/registration, pre-qualification, technical and commercial bid submission, and bid evaluation. The process is expected to be completed in six months. The first bid round that was formally organised by the FGN began in 2001 and was concluded in 2003. At the end of the bid round, 24 licenses were awarded to 31 indigenous companies. Another bid round was proposed in 2013 with a lot of preparation and guidelines released. Unfortunately, it never held.
Flagging off this bid round under the current economic situation points to the government’s urgent need for funds. According to the DPR guidelines, interested bidders will be required to pay a total of US$115,000 and N5m in non-refundable statutory fees comprising an 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.
While we see the need for these asset sales to generate much-needed revenue for the Federal Government, we are concerned that a bidding process under the current environment will be fraught with difficulties. Firstly, the current fluctuations in oil prices may mean that intending investors may base their valuations on pricing models that can become unrealistic in the near term and then are unable to develop such fields acquired. Many local companies have been hard hit by the effects of covid -19 and the ensuing significant decline in oil prices, hence they may not have sufficient cash flows nor be able to raise needed funds from both local and international banks.
In addition, we see regulatory difficulties hampering interest in the fields. For example, the lack of passage of the long awaited Petroleum Industry Bill (PIB) remains a significant deter. Furthermore, the recently passed Deep Offshore and Inland Basis Production Sharing Contracts (Amendment) Act (DOA) has made investments in Nigeria oil & gas assets less attractive. These negative regulatory sentiments has led to many IOCs decreasing investments in the Nigerian oil & gas industry. Overall, we think this may result in many of the fields ending up in the hands of individuals with cash but with no industry expertise. Again, with the current economic crunch, many of the fields may be sold significantly below their fair value.
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Update: Health Minister states side effects of COVID-19 vaccines
Dr. Osagie Ehanire has disclosed the side effect of the COVID-19 vaccines.
Minister of Health, Dr. Osagie Ehanire has stated the side effects of the COVID-19 vaccines, which he said is mild.
The minister disclosed this during the live broadcast when President Muhammadu Buhari took his vaccine shot on Saturday.
According to the Minister, the reactions are usually mild and only few people had complained of mild pain in the part of the body they got the shot.
He said, “It is not everybody that complained of reactions/side effects but few had complained of mild pain at the part of the body they got the shot.
”Usually manufacturing vaccines take not less than 4 years but this only took about 1 year, which is the reason some people are apprehensive about the vaccines. This was manufactured in the United Kingdom and has been certified.”
Ehanire, explained that the jab is painless as a narrow gauge syringe was used with a small quantity injected in the upper arm.
He added that the after-effects are mild but accompanied by little discomfort in the area that was injected.
Present at the brief ceremony were the Secretary to the Government of the Federation (SGF) Mr Boss Mustapha; Minister of Information and Culture, Alhaji Lai Mohammed; the Chief of Staff to the President, Professor Ibrahim Gambari and other members of the Presidential Task Force (PTF) on COVID-19, senior government officials and journalists.
Update: President Buhari, VP Osinbajo get COVID-19 vaccine shots
President Buhari and VP Osinbajo have been vaccinated against COVID-19 on Saturday at the State House, Abuja.
President Muhammadu Buhari and Vice President Yemi Osinbajo have been vaccinated against COVID-19 on Saturday at the State House, Abuja.
President Buhari and VP, who received his COVID-19 vaccine shot on Live TV broadcast, urged Nigerians to emulate him and do the same to curb the pandemic in the most populous black nation.
Both were administered their jabs, on Saturday morning, at the Banquet Hall of the presidential villa, Abuja at a ceremony broadcast live on national television.
Their inoculation followed their e-registration and filling out of their vaccination cards by the Executive Director of the National Primary Health Care Development Agency (NPHCDA), Faisal Shuaib.
Vaccination of Buhari was done by Chief Personal Physician to the President, Dr Suhayb Rafindadi.
Osinbajo was also vaccinated by his personal physician, Dr Nicholas Audifferen.
Nairametrics | Company Earnings
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- Seplat falls into a loss in FY 2020
- 2020 FY Results: Cornerstone Insurance Plc reports a 61.1% decline in profit
- Ellah Lakes increases operating expenses by 33.36% in HY 2020
- 2020 FY Results: Nigerian Breweries reports a 54.3% decline in profits in 2020
- Abbey Mortgage Bank projects N51.08 million profit in Q2 2020.