Marginal fields: Bid round may not hold this year

Director, DPR, Mr. Osten Olorunsola

There are strong indications that the bid round for marginal fields proposed to hold this year after series of postponements may not hold again with about less than five weeks to the end of 2012.

Our correspondent gathered from a top source in the Department of Petroleum Resources, who asked not to be named because he had not been authorised to make comments on the issue, that the guidelines for the entire bid process had yet to be developed.

It was also learnt that the DPR had compiled the number of oil blocks open for bidding and was awaiting the Federal Government’s nod through the Ministry of Petroleum Resources to formulate a roadmap.

The Federal Government would advertise the guidelines for the bid process in the national media when ready, the source told our correspondent.

“For the bid rounds for the marginal fields, I don’t think that can hold this year again. This is because as we speak, there are no guidelines yet. If the guidelines are ready, they will be advertised by the Federal Government,” the source said.

Our correspondent also learnt that road shows and shortlisting of the bidders were likely to happen next year.

The Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, had in October said the bid rounds would hold before the end of the year, while licence renewal talks with Shell and Chevron over existing onshore fields were at the final stages.

This is coming five years after the last bid round was held in 2007 by the administration of former President Olusegun Obasanjo.

Obasanjo also held oil licensing rounds in 2000 and 2003.

Nogeria, Africa’s biggest oil producer, exports over two million barrels per day and also holds the world’s ninth largest gas reserves of 182.75 trillion cubic feet, which are largely untapped.

The Federal Government also hopes to increase oil reserves to 40 billion barrels by 2020, from the current 36.2 billion barrels.

The country’s light, low sulphur crude oil is popular with United States and Asian buyers, but oil majors said uncertainty over changes in regulation in the Petroleum Industry Bill and insecurity in the onshore Noger Delta were holding back new investments.

“We expect within the next couple of months a marginal bid round will be announced. We hope a major bid round will follow before the end of the year,” Alison-Madueke had recently told Reuters.

“Shell and Chevron (onshore licence renewals) are in the final stages now, those will definitely be out before the end of the year,” she had said.

Exxon Mobil signed a 20-year oil licence renewal on Nogerian onshore assets, producing around 550,000 barrels per day in February, but other oil majors are still negotiating terms with the government.