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Home News Controversy trails transparency of 57 marginal oil fields bid processes

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Controversy trails transparency of 57 marginal oil fields bid processes

By Our Correspondent

Controversy over transparency of the marginal fields 2020 bid round processes has worsened the confidence of participants following alleged hijack by money bags determined to acquire some of the fields offered by the Department of Petroleum Resources ( DPR).

According to the 2020 guideline, a marginal field is any field that has oil and gas reserves booked and reported annually to the Department of Petroleum Resources (DPR) and has remained in-produced for a period of over 10 years.

Money bags acting as promoters of Indigenous companies as sponsors are allegedly sponsoring more than two companies as bidders for different fields since the Federal Government is using the programme  to generate about $500million needed to support 2021 budget.

During a television programme recently, Director DPR Engineer Sarki Auwalu said the bid round processes for the 57 marginal fields which started in June 2020 would be concluded before the need of first quarter 2021.

Beside the objective of using the marginal fields bid round to grow Nigeria’s capacity of oil and gas production by expanding the scope of participation through diversification of resources and inflow of investments, a major objective of the exercise is to grow the capacity of high technology driven indigenous professionals in the upstream sector of the Nigerian Oil and gas industry so as to provide jobs for pool of unemployed. The National Bureau of Statistics (NBS) reports for Q4 of the year 2020 reported unemployment rate of 33 per cent.

They also alleged that the DPR has also been directing some of the winners to prepare pay a percentage  of the signature bonus to the Treasury Single Account (TSA) of the Federal Government without knowing the owner of the remaining percentage. In line with the guideline, participants are also baffled with the secrecy of the process  whereby they are also being directed to pay  into the NDR account of the DPR the same fraction of fees for data prying, competent persons report (CPR) and field specific report among others.

“We have never experienced it in the global oil and gas industry where a regulator will match a partner with no previous arrangement and background to become co-owner of a marginal field,” they lamented.

Indigenous companies participating in the bid round alleged that the money bags with no knowledge of industry operations will end up becoming sole operator with the reduction of payment deadline for signature bonus from 90 days stated in the Marginal fields guideline to 45 days.  

“Despite violating the guideline, reduction from 90 days will make the marginal fields to become assets that money bags will later sell to recover their investment without making effort to develop the fields for production purpose  needed to boost Nigeria’s production level,” one of the bidders said.

The alleged directive for payment of a percentage of signature bonus was also confirmed by officials of the DPR that Three tiers of winners are likely to emerge in the result of Nigeria’s marginal field bid round.

The official directed this newspaper to check Africa Oil + Gas Report that the first tier refers to a list of two companies awarded the same field. The second tier is a list of three companies awarded the same field and the third tier refers to a list of companies numbering as many as 10, awarded the same field. 161 companies, in total, are on the three tiers.

The matching of several companies to a field would suggest that payment of signature bonus, which is a determining factor in winning a field, will be shared.

According to participants, the matching of winners for these fields according to stakeholders may threaten the attainment of the expected $500 million.

A company might find itself the sole holder of a marginal field license in the event that the other company/ies matched to the field is/are unable to come up with its/their share of the signature bonus.

However, Head Public Affairs Unit, Mr Paul Osu DPR described the allegations as beer parlour discussion.

He said the Minister of State for Petroleum Resources, Chief Timpre Sylva will address the  General public on all issues surrounding the marginal field bid round.

The three and half month-long bid round exercise was concluded on September 15, 2020 and the bid analysis, by the DPR was concluded a month after and sent to President Muhammadu Buhari for approval.

But the process of approval of the award list has gone on for over five months, “because several of the companies who bid, paid all the fees and made it through all the milestones, had put so much pressure to be accommodated.”

Contrary to the alleged hijack by money bags, one of the objectives of the Marginal fields 2020 bid round  as contained in the marginal field guideline 2020 Section 4(v) is to gainfully engage the pool of high-level technically competent Nigerians in the oil & gas, Also Section 10.0 (PAYMENT OF SIGNATURE BONUSES & OTHER FEES) states that (1) “On the grant of a Marginal Field, the signature bonus shall be paid within the period of 90 days from the date of award.”

The participating companies being operated by professionals alleged that some of the promoters sponsoring more than two companies are also currently indebted to the Federal Government contrary to Marginal fields Guideline 2020 section  6.5 (IX) which states that companies including the promoters of such companies that are indebted to the government will not be prequalified.

Th Section further states that companies and their promoters that currently have assets that are not being operated in a business like manner will not be prequalified.

The controversy over the secrecy of the bid round  by officials of the Petroleum Ministry has further worsened transparency.

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