Known as Stubb Creek Marginal Field, it is located on Oil Mining Lease 14, which belongs to Shell Petroleum Development Company of Nigeria, a unit of Royal Dutch/Shell Group.
Stubb Creek is the first of 24 marginal fields allocated last February by the government to go to indigenous oil companies for development.
Marginal fields are fields considered uneconomical for development due to the fields' location or low levels of reserves.
Speaking at the signing ceremony in Abuja, Edmund Daukoru, special adviser on petroleum and energy to President Olusegun Obasanjo said the government allocated the marginal fields to encourage indigenous participation in the upstream sector of Nigeria's oil industry.
Daukoru said the policy would accelerate the growth of Nigeria's oil industry. The government has set a target of achieving 45% local content in the industry by 2005. Local content, as measured by indigenous personnel and materials, currently stands at about 10-15% in the industry, according to some estimates.
Funsho Kupolokun, group managing director of NNPC warned that winners of the fields who failed to develop them 24 months after the agreements were signed, risked forfeiting the fields.
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