11/08/2022

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Timipre Sylva charges 57 marginal oil field investors to quickly develop assets to enjoy full PIA benefits

3 min read

Timipre Sylva charges 57 marginal oil field investors to quickly develop assets to enjoy full PIA benefits

…Presents Petroleum Prospecting License to 57 awardees

…NUPRC rakes $2.7 billion from 2020 marginal field bid round

Minister of State, Petroleum Resources, Chief Timipre Sylva, on Tuesday, charged the 57 marginal field investors to quickly develop their assets and enjoy the full benefits in the Petroleum Industry Act (PIA), which seeks to, among others, increase crude oil production, grow reserves and reduce cost of production.

The Minister, who gave the charge in Abuja at the formal presentation of Petroleum Prospecting Licences to the operators by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), noted that $2.7 billion was generated from the bid rounds conducted in 2020.

 

Sylva urged the awardees to take advantage of the current attractive oil prices to bring the fields into full production within a short period in line with President Muhammadu Buhari’s aspiration.

Timipre Silva charges 57 marginal oil field investors to quickly develop assets to enjoy full PIA benefits
Chief Timipre Sylva with some of the awardees

 

He assured the investors that the industry regulator, NUPRC, will support any aspiration for upstream development with midstream facilities integration towards maximizing the value chain.

“It is envisaged that robust collaboration between the awardees and the Commission will lead to better understanding of the challenges being encountered. Therefore, I encourage you to promptly reach out to the Commission for guidance and support including mediations when challenges arise.

ALSO READ: Federal government set to issue prospecting licences to winners of marginal oil fields today

“The onboarding of new oil and gas players in the petroleum sector is part of this government’s policy to encourage more indigenous participation in our petroleum operations. Indeed, this will boost activities in the oil and gas sector, add to our production output, and create additional employment opportunities for Nigerians,” the Minister stated.

Earlier in his remarks, the Chief Executive of NUPRC, Gbenga Komolafe, recalled that the marginal fields award initiative began in 1999, adding that 30 fields have been awarded, with 17 currently producing.

A breakdown of the allocation of the fields to indigenous operators is as follows: two fields awarded in 1999, 24 in 2003/2004; one each in 2006 and 2007, and two in 2010. 10 years after, in 2020, 57 fields were put up for bidding.

Komolafe said the PIA has brought an end to the era of marginal field awards.

“Section 94(9) of the Act states that ‘No new Marginal Field shall be declared under this Act'”

Accordingly, the Minister shall now award PPL on undeveloped fields following an open, fair, transparent, competitive, and non-discriminatory bidding process in line with Sections 73 and 74 of the Act.

“We shall continue to provide a predictable and enabling regulatory environment to operators in line with our technical and commercial statutory mandates with a view to optimizing the development and exploitation of the nation’s hydrocarbon resources.

“The average price of crude oil in recent months has been above $100 per barrel. However, the impact of the upswing in the crude oil price is not reflecting in the nation’s revenue earnings due to disruptions in our national oil production owing to sabotage, theft, and other operational challenges. Therefore, potential Licensees are urged to take advantage of the current market realities and quickly bring their fields to production,” he said.

The event also saw the unveiling of the template and procedure guide for the host communities

Development Trust for commencement of implementation of the provisions of Section 235 of the PIA, 2021 for attraction of the dividends of the Act to the host communities.

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