Nigerian marginal fields for indigenous oil firms

Mar 12, 1997 01:00 AM

Mar. 1, 1997 Some 10 indigenous oil firms have submitted bids to the Nigerian government on 183 fields considered "marginal" or unattractive by multinational joint-venture partners of the state-owned Nigerian National Petroleum Corporation (NNPC). This is despite denials by the six joint-venture partners -- Shell, Chevron, Mobil, Agip, Elf and Texaco -- that there are such fields in their portfolio.
But consideration of the bids forwarded to the Department of Petroleum Resources (DPR), the industry's regulating agency, is being held up, pending government approval of "guidelines for farm-out and operation of marginal fields."
Industry sources said that four of the applications were submitted to DPR last November. The identity of the companies submitting bids, and details of their applications, have not been given.
Some of the guidelines being prepared by DPR for any indigenous oil company to operate on a field include the fact that they must have foreign technical partners owning not more than 40 % equity participation in the proposed venture. The guidelines bar multinational firms having current oil-prospecting or oil-mining licenses, from bidding for marginal fields. Indigenous oil companies are also expected to relinquish their oil-prospecting and oil-mining licenses before being considered for owning, operating or acquiring interests in any of the marginal fields. The fields already identified by the government are believed to contain a total of 2.3 billion barrels of oil.
The fields, some of which have a capacity to produce about 5,000 bpd and between 5 and 50 mmb over a 20-year period, are believed to have been abandoned by the multinationals, due to marginal economics. But joint-venture company officials insist there are no marginal fields in their portfolios and that some of their fields have not been developed because of the low level of funding of joint-venture operations by the government. They also maintain that their leaseholds, on areas which the fields are located, are yet to expire.
Officials said the new bids would be considered by DPR after petroleum resources minister Chief Dan Etete had approved the draft of operating guidelines forwarded to him by DPR last October. The minister is also expected to give final consent to any of the applications already received. Successful bidders may be required to pay a minimum fee of $ 10,000 per field to the multinational company that gets a license to operate in the area.

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