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Fears over delayed bid for oil fields

By on June 9, 2014

An air of uncertainty now hovers around the planned marginal field bid round in the petroleum sector after it failed to hold in March 2014 as earlier announced.

The Ministry of Petroleum Resources has been silent on a new date for the exercise and the issue is currently generating a controversy in the sector.

The Federal Government in November last year had indicated that it would conduct the exercise in March 2014.The announcement was made after many cancellations and postponements.

After missing the date, Nigerians have yet to get any explanation from the relevant authorities on the cancellation. Also, no new date has been announced by the ministry.

There are, however, speculations that the process has been caught in the web of manipulation, as the Department of Petroleum Resources has yet to disclose the identities of 31 onshore and off-shore fields for sale.

This is currently generating concerns among stakeholders in the industry, including labour, players in the business, as well as industry watchers.

The President, Petroleum and Natural Gas Senior Staff Association of Nigeria, Mr. Babatunde Ogun, told our correspondent on the telephone that it was high time government opened up on the state of affairs with respect to marginal field bid round.

“They should tell Nigerians what is actually happening,” he said.

Ogun said the ongoing situation in the sector only allowed for suspicion, adding, “This process is taking too long, and the industry must be carried along. Not disclosing happenings in the sector will give room for more suspicion.”

He also said, “If the reason for the non-conclusion of the process is that people did not meet the set criteria, that should be made known to Nigerians; and the relevant authorities should not hesitate to cancel the entire process and start a new one entirely.”

The PENGASSAN boss said initially, it was believed that government was only taking its time and adhering to due diligence; hence, the series of postponement. But he noted that the persistent shift called for concerns.

Speaking in the same vein, a top officer in the Ministry of Petroleum Resources, who would not want his name mentioned because he had not been authorised to speak on the matter, said in a normal situation, the bid round for the marginal fields should have been concluded by now given the level of commitment by the bidders and the industry regulator.

He, however, averred that the process might have been politically influenced.

“As you can see, the 2015 elections are around the corner. Money will be needed to do many things, and the petroleum sector has a lot of financing potential. It is most likely some political figures are manipulating some things,” he said.

When our correspondent reached the DPR, an official in the department, who pleaded anonymity, said the DPR was awaiting the Ministry of Petroleum Resources’ directives on the issue.

The source stated, “There is little or nothing we can do about implementing one deadline or the other as far as the marginal field bid round is concerned. It is the Ministry that has the final say, and we’ve not been given any directives yet. I will let you know when we have information on the matter.”

The Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, who declared the bid round open at a news conference in Abuja, said it was aimed at deepening the participation of indigenous oil companies in the upstream sector of the oil and gas industry.

This, she said, was also aimed at generally increasing the exploration and production activities in the oil and gas sector.

Giving details of the licensing round, Alison-Madueke stated that a total of 31 fields were on offer with 16 of them located onshore, while the remaining 15 were in the continental shelf.

She had said the Federal Government was committed to transparency in the bid process and would encourage companies interested in the assets to form consortia that would enable them to leverage each other’s strengths.

The minister had said, “Over the next two weeks, the DRP will undertake a road show in different parts of the country about the programme. This will be followed by a three-and-a-half months of competitive bidding process in line with the Federal Government’s commitment to openness and transparency in the conduct of business activities in the country.”

Alison-Madueke noted that the marginal field operators, currently accounting for about one per cent of the nation’s production, had also recorded huge discoveries in excess of 100 million barrels to the nation’s reserve base.

She added that of the eight assets that had so far been divested by the international oil companies, at least four were held by active marginal field operators, who had continued to demonstrate a remarkable technical ability in operating significantly larger assets.

 

 

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