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Widespread interest as over 300 companies apply for the marginal oil field bid

Over 300 companies have applied to be prequalified for the Nigerian Marginal Field Bid Round.

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Widespread interest as over 300 companies apply for the marginal oil field bid

Despite the restraining order by Federal High Courts in Lagos against the Federal Government from selling and accepting bids for some marginal oil fields, there has been widespread interest expressed in the bid round of the oil fields.

Over 300 companies have applied to be prequalified for the Nigerian Marginal Field Bid Round, with many others unable to gain access to the portal within the 3 weeks that the bid round was launched.

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According to a monitored report, the Federal Ministry of Petroleum Resources pointed out that it is likely that over 500 companies would have applied within the 3 weeks.

READ MORE: Banks to recover N6.125 trillion loan from oil firms 

Marginal fields are oil fields that have been discovered by major international oil companies (IOCs) in Nigeria in the course of exploring larger acreages and which fields have not been developed for more than 10 years.

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According to a retired reservoir engineer, “It would take around $150,000 for a qualified application to get all the way to signature bonus and a number of Nigerian businessmen. Once you get to the point of being qualified and all you have to pay is the signature bonus, you are there. There is the impression that a marginal field license has conferred on you some entitlement.”

READ ALSO: NEITI charges NNPC to strengthen data mainstreaming, systemic disclosure

It should be noted that the submission of technical/commercial bids during the entire exercise, ends on August 16, 2020. Consequently, between June 21 and August 16, the following will happen:

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  • Evaluation of submission and preparation of report, June 22 to July 5
  • Announcement of Pre-Qualified Applicants and Issuance of Field Teasers by July 5
  • Data Prying, Leasing, Purchase of Reports from July 6 to August 16
  • Payment of Application and Bid Processing Fee and Submission of Technical and Commercial Bid from July 6 to August 16.

The schedule means that the heavy lifting will happen between July 6 and August 16.

It can be recalled that the Department of Petroleum Resources (DPR) about 3 weeks ago, announced the opening of its Marginal oil bid round for 57 fields that are located on land, swamp and shallow offshore terrains. This was the first in almost 20 years.

The DPR, the oil industry regulator, however, about 11 days ago, announced the extension by 1 week to June 21, the deadline for the registration of interest to bid for the marginal oilfields.

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Patricia

Chike Olisah is a graduate of accountancy with over 15 years working experience in the financial service sector. He has worked in research and marketing departments of three top commercial banks. Chike is a senior member of the Nairametrics Editorial Team. You may contact him via his email- [email protected]

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Energy

Update: FG increases fuel price to N143.80 per litre

This was disclosed by Petroleum Products Pricing Regulatory Agency (PPPRA) in a circular.

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The Federal Government has announced an increase in the new pump price of Premium Motor Spirit, otherwise known as Petrol, to N143.80 per litre.

According to a monitored report, this was disclosed by Executive Secretary of Petroleum Products Pricing Regulatory Agency (PPPRA), Abdulkadir Saidu, in a circular dated Wednesday, July 1, 2020, to oil marketers,

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The statement from the circular says, ‘’After a review of the prevailing market fundamentals in the month of June and considering marketers’ realistic operating costs, as much as practicable, we wish to advise a new PMS pump price band of N140.80-N143.80 per litre for the month of July 2020.’’

‘’All marketers are advised to operate within the indicative prices by the PPPRA.’’

READ ALSO: Nigerian Treasury Bills plunge to 3.39% per annum

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He also pointed out that the ex-depot for collection include the statutory charges of bridging fund, maritime transport average, National Transport Allowance and administrative charges.

The federal government had a few months ago announced its plans to stop the subsidy payment regime as they said that the downstream sector of the oil industry will be fully deregulated. The government said that the prices of all petroleum products which includes fuel would be fully determined by market forces, following the removal of the existing cap on fuel prices.

READ ALSO: Subsidy economics

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PPPRA had stated that it arrived at the new price regime after taking into consideration the operating costs of the oil marketers.

It can be recalled that at the beginning of the month of June, there was a minor adjustment of fuel price as it was fixed at N121.50 per litre from N123.50 per litre in May. The new price in July represents an over N20 per litre increase when compared to the price last month.

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Energy

Largest private investment in Africa begins $15 billion financing

The entire $23 billion process will ship natural gas from Africa to the global markets.

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Natural gas project, Largest private investment in Africa begins $15 billion financing

The Mozambique Liquefied Natural gas project by French firm, Total SA has started its initial process of finalizing the first $15 billion finance needed for its development.

According to Total, the construction period which started in August 2019 has a goal of rewarding $2.5 billion in contracts to indigenous Mozambican firms and will be the biggest private investment in Africa.

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READ ALSO: Nigeria received capital inflows worth of $33.27 billion in 17 months

The project located at the Rovuma Basin will have approximately 65 trillion cubic feet of recoverable natural gas with initial plans for two train project with scope to expand up to 43 million tonnes per annum.

The project requires a series of documents to be signed, a process that will take 3 days.

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The entire $23 billion process will ship natural gas from Africa to the global markets and as many as 20 banks have been involved in the financing.

READ MORE: Makinde inaugurates N1bn SMEs development scheme

FDI to the continent fell 10% to $45 billion in 2019 according to the United Nations Conference on Trade and Development and expects FDI to drop between 25%- 40% in 2020. 

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Last month, Africa’s biggest economy, Nigeria announced plans to raise N163.32 billion ($420 million) through concessions of 10 major highways as African nations look for alternative sources of revenues during the recession caused by the COVID-19 pandemic. 

IMF expects the growth of sub-Saharan’s economy to contract by 3.2% in 2020.

 

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Energy

Imported fuel reportedly of lower quality compared to illegally-refined fuel in the Niger-Delta creeks

The importation of petroleum products has remained a major financial burden to Nigeria.

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A recent study by the Stakeholder Democracy Network (SDN) revealed that black market fuel refined in the creeks of the Niger Delta tends to have higher quality than the legally imported petrol and diesel imported into Nigeria from Europe. 

Even though Nigeria has the capacity to pump over 2 million barrels a day of high grade “Bonny Light” crude, Nigeria’s refining capacity has been heavily reduced to nothing due to the dysfunctional state of four of Nigeria’s refineries which are managed by the Nigeria National Petroleum Corporation, NNPC.  

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In the meantime, the importation of petroleum products has remained a major financial burden to Nigeria, even as the NNPC continues to spend billions of naira to maintain the loss-making refineries. 

Note that Nigeria imports about 900,000 tons of low-grade European fuel mainly refined in Belgium and Netherlands which has led to horrible air pollution in Nigeria’s major cities. 

The report found out that the fuel imported by Nigeria surpassed EU pollution limit for gasoline by over 43 times. 

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READ MORE: Analysis: Seplat’s transfer of OMLs has us wary

The SDN found out the fuel imported by Nigeria can’t even be sold to countries with higher environmental standards and of lower grade than illegally refined crude in the Niger delta. 

Nigeria is ranked Number 4 globally in deaths related to air pollution, about 114,000 Nigerians die every year from respiratory diseases due to air pollution. 

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READ ALSO: CBN to offer Niger Delta rice farmers single-digit loan 

Nigerian cities like Port Harcourt have been dealing with a black soot problem for the past couple of years now due to Gas- Flaring and illegal oil refining issues in nearby communities. 

The illegal refineries now produce up to 20% of fuel consumed in Nigeria, according to the report. 

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The report outline that with the outbreak of the COVID-19 which attacks the respiratory organs, the high levels of pollution pose a threat to the health of Nigerians especially in the Niger delta regions and other heavily polluted areas. 

READ ALSO: Dangote discloses fuel delivery channels, refinery to explore European and American markets

In 2017, Nigeria and her West African neighbours like Ghana, Togo, Benin and Ivory Coast promise to stop imports of low grade European refined fuel. However, only Ghana has acted on its promise as Nigeria claims it needs more time to comply. 

The report urges Nigeria to enforce the sulphur demands and engage with local refiners working with Nigeria’s high grade of crude to reduce pollution. 

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