Business & Economy
Breaking: FG Expects First Oil From New Marginal Fields By 2022
The Federal Government has said it is expecting most of the marginal fields, which investors bid for in the recently concluded bid round, will achieve first oil starting from next year.
The Director/Chief Executive Officer, Department of Petroleum Resources, Mr Sarki Auwalu, said this on Wednesday during a strategic engagement session in Lagos with the Nigeria Extractive Industries Transparency Initiative, led by its Executive Secretary, Mr Orji Ogbonnaya-Orji.
The Minister of State for Petroleum Resources, Chief Timipre Sylva, had said in March that it had received signature bonuses from 50 per cent of the winners of marginal oilfields following the conclusion of the bid process.
The DPR had said in February that the government was expecting to generate at least $500m in revenue (N189.5bn) from the marginal field bid round.
Auwalu said the government was already taking advantage of the success of the programme.
He said, “Investors are rushing to invest in all the 57 fields on offer. We want to grow the reserves because the growth of the reserves gives us global competitiveness. OPEC will only give you volumes based on your recoverable reserves. We have to grow our reserves, and growing the reserves means more competitiveness for our nation.
“This is where we are: the issuance of the awards to the marginal field bidders – the awardees. And already, we see investment coming. Once we form the SPVs (special purpose vehicles) for field development, you can see capital inflow into Nigeria, and definitely, we see a very bright future. Then, we expect to add more volumes because it is a game of number.”
According to Auwalu, the DPR knows the volume every oil and gas well in the country produces.
He said, “We give the technical production allowable for each well. We test every well and record it. So, we know where we are getting our volumes between now and 2024.
“We expect first oil from most of the marginal fields, for which we just concluded bid round, around January 2022 because all the things that will retard them will go, and we need that money for the country.”
The Federal Government, through the DPR, had announced on June 1, 2020 the start of the 2020 Marginal Field Bid Round, with 57 fields available for indigenous companies and investors interested in participating in the exploration and production business in Nigeria.
The agency said last month that 161 companies had been shortlisted to advance to the final stage of the bid round.
The DRP boss said a refining revolution was underway in the country,
“We have Dangote refinery coming up; we have BUA refinery. In fact, by 2024/2025, we may have domestic refining capacity of about two million barrels per day capacity, with NNPC refinery volumes of 445,000bpd, Dangote’s 650,000bpd and BUA’s 200,000bpd and others combined,” he added.
