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June 3, 2020

Nigeria launches first licensing round for marginal oilfields

The Department of Petroleum Resources (DPR) of Nigeria has launched its first licensing round for marginal oilfields in nearly 20 years.

By Himaja Ganta

The Department of Petroleum Resources (DPR) of Nigeria has launched its first licensing round for marginal oilfields in nearly 20 years.

Marginal fields are oil blocks that are typically developed by indigenous companies.

With the new licensing round, which is the first marginal field round since 2002, the country hopes that oil output will be increased.

Nigeria also hopes that the marginal field licensing round will bring in much-needed revenues from fees associated with the licences.

In a press statement, DPR said: “According to the DPR guidelines on the 2020 oil bid round exercise, and payment by interested bidders shall attract non-refundable chargeable fees as follows, an application fee of N2m per field, bid processing fee of N3m per field, data prying fee of $15,000 per field, data leasing fee of $25,000 per field, competent persons report of $50,000, and $25,000 for fields specific report.

“With the above, interested bidders are expected to pay a total of $115,000 in statutory fees and another N5m in local currency.

“At the official exchange rate of $360/$1, the 57 oil fields on offer gives N2.36bn, including the N5m payment.”

Under the 2020 oil bid round exercise, DPR noted that a total of 57 fields located on land, swamp and shallow offshore terrains are offered for bidding.

In April, DPR instructed oil and gas firms to practice social distancing at project sites. The measure is part of the government’s plans to stem the spread of the Covid-19 outbreak in the country.

In March, DPR instructed oil and gas firms to reduce the workforce on offshore platforms.

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