The Federal Government has said that the Ministry of Petroleum Resources is expected to generate $600 million from its new marginal oil fields.
This follows the completion of the process for the acquisition of the marginal fields and the subsequent notification of 161 winners.
According to a report from the News Agency of Nigeria (NAN), this disclosure was made by the Minister of State for Petroleum Resources, Timipre Sylva, at the fifth edition of the Special Ministerial Briefings coordinated by the Presidential Communication Team, held at the Presidential Villa, Abuja, on Thursday.
What the Minister of State for Petroleum Resources is saying
Sylva in his statement said, “We have started to receive signature bonuses paid by the winners. At least from the last account report, I got from DPR, almost 50% of the winners have paid. What we are expecting from the whole process is about 600 million dollars.
And of course, we have also given an allowance for people to pay in Naira so you have to pick which currency to pay in – in Naira or dollars. So, at this point, we cannot give any figure in any currency but just to tell you that payments have been encouraging and they have up to April 20, 2021.
So there is some time although the jury is still out, we believe that by April we would have got a lot of them to pay,’’ the minister said.
Speaking on the government’s decision to invest $1.5 billion on rehabilitation of Port-Harcourt Refinery when it is talking about privatization and commercialization of the oil and gas industry, the minister said:
“I have always said that our refinery cannot survive with the regime of subsidy; because you cannot be refining at a cost and selling at a subsidized rate. Now that constraints will be taken away by deregulation – that is the more reason why we must fix our refineries so that our refineries can now function optimally.’’
The minister maintained that it would be better for the government to privatize a functional refinery as it would fetch more revenue for the treasury.
“A functional refinery will definitely fetch more for the government than a non-functional refinery. That’s why we feel that we have to rehabilitate this refinery and then the government will later decide on whether to privatize, whether to commercialize. But at this point, we want to give Nigerians a functional refinery,’’ he said.
He said the government’s decision to rehabilitate the refinery is based on the recommendation of experts.
What you should know
- Recall that in June 2020, the DPR announced the commencement of the 2020 marginal oilfield bid round, 18 years after the last bid round was conducted, and it was open to indigenous oil & gas firms and investors interested in participating in the exploration and production business in Nigeria.
- The DPR later disclosed that it had shortlisted 161 successful companies, from a list of over 600 companies that applied for pre-qualification, to advance to the next and final stage of the bid round process for 57 marginal oilfields in the country.
- Marginal fields are known oil or gas discoveries on an International Oil Company (IOC)-owned block, 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.