Nigeria Opens Bids From 66 Companies on Marginal Fields

Sixty-six out of 70 pre-qualified indigenous companies placed bids on Nigeria's 24 marginal oil fields. The Department of Petroleum Resources, which conducted the bid round said the 66 companies were those that met the September 13, 2002 deadline for the submission of the bids, which was the second phase of the bids evaluation exercise. The Director, DPR, Mr. Mac Ofurhie said at the occasion that a committee, comprising representatives of the DPR and the lease holders of the marginal fields (the Nigerian National Petroleum Corporation and its joint venture partners) would evaluate the bids. The committee, he added, would evaluate the bids based on the following conditions:

  • Competence of the indigenous companies to operate the fields if and when allocated,
  • Ability of the companies to raise capital to pursue the fields development program, and
  • The level of the Nigerian content targeted for full field development.

Ofurhie, who was represented at the event by DPR's Deputy Director, Inspections, Mr. Kayode Oloketuyi, stressed that only companies that demonstrate technical and financial capability would qualify for the third and final round of the bid program. "We want companies that are very technical, that will operate the fields just like the multinational companies, only that theirs are marginal fields," he said.

A total of 408 bid packages were received from 142 companies when the government kicked off the program last November. The screening of the packages under the first phase of the whole exercise, led to the pre-qualification of 70 companies last June. Bids from the companies that met the requirements for the current technical and commercial evaluation stage, would proceed to the third phase, which is the negotiation of the detailed farm-out terms between the operator of the marginal field and the bid winner. The DPR will be the adjudicator. Winners will then pay a signature bonus of $150,000 (N19.05 million) per field. Marginal fields are fields capable of producing less than 10,000 barrels per day (bpd) but have been acquired by the Federal Government from multinational oil companies who had abandoned them, due to low reserves and productivity as well as higher overhead cost. The collective reserves of the marginal fields total approximately 1.3 billion barrels.