Following the launch of the new marginal field bid round by the Department of Petroleum Resources (DPR), a Lagos based commercial law firm, Perchstone & Graeys LP, in recognition of the importance of key stakeholder engagement in this defining bid round, organized a webinar tagged “Perspectives on Investing in Nigeria’s Oil Marginal Fields.”
The webinar was organized based on the belief that marginal fields are expected to continue to play a significant role in the oil and gas sector, including the promotion of indigenous participation, increased oil production capacity and gas reserves, as well as growth in the employment of competent Nigerians.
The webinar discussion, therefore, focused on key issues surrounding the ownership of marginal oil fields in Nigeria, investment considerations, associated risks, and projections regarding the 2020 guidelines.
The first marginal field bid process occurred in 2002 and at the end of that process, 24 marginal fields were awarded to 32 companies. Other bid attempts following the 2002 event were unsuccessful. To facilitate the 2020 bid round, the DPR revoked previously awarded marginal fields and has made 57 marginal fields available for bidding. The DPR has also released the 2020 Guidelines which set out a roadmap of sorts for this bidding process. The process is delineated into seven stages; from the application by interested bidders to the announcement of winning bidders.
Then webinar session was moderated by Mr Tolu Aderemi, Partner at Perchstone & Graeys, and head of the firm’s Energy & Infrastructure team. The rich and diverse roster of speakers featured Mr. Osten Olorunshola, former director, Department of Petroleum Resources; Mr. Abiye Membere, former Group Executive Director Exploration and Production, NNPC; Mr. Glossner, CEO & Founder of Domusaurea Consulting; and Mr. Ashu Shinghal, Chief General Manager, Corporate Strategy Planning & Advocacy GAIL (India) Ltd.
Mr. Olorunshola, the webinar’s keynote speaker, suggested that a timely legislative intervention such as the passage of the Petroleum Industry Bill would come in handy at a time like this to encourage participation. He cited demand reduction and destruction, price war, and market damage as contributing factors to the present dearth of investment in the sector. He, however, encouraged industry players to look beyond and strive to gain market share now as there are still untapped resources to be harnessed in the sector.
Addressing the critical investment considerations and actions for any successful marginal field in Nigeria, the speaker advised investors to pay close attention to bankable reserves, technical personnel, financing methods, and strategic partnership arrangements to mitigate the associated risks that have contributed to the abysmal failure of marginal fields.
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