This bid round is the first in nearly 20 years1 and has on offer, 57 fields located on land, swamp and shallow offshore terrains. In a release issued last night, the dpr described as misleading documents flying in the media purporting that nigeria has endorsed a 2020 marginal field bids rounds in order to. This document also provides clarifications, explanations and directives on the implementation of the guidelines. Risk and reward of nigerias 2020 marginal field rounds. The critical success factors for marginal oil field development in. Fg flagsoff 2020 marginal fields bid round department of. The legal and regulatory frame work is critical for marginal field development in nigeria. Nigerias marginal field bid round opportunities for. The aim and objective of study is to evaluate the influence of technological factors on the economic development of marginal oil field in nigeria. The legal framework for the award of marginal field in nigeria was established by the enactment of the petroleum.
Mar 24, 2021 nigeria awards 57 marginal oilfields to 161 bidders. Paper presented at the nigeria annual international conference and exhibition, abuja, nigeria, august 2009. An investors guide to marginal field acquisition in nigeria contents front cover disclaimer contents about the report n igeria n ocus or who 1. Sustainable operation of marginal fields in nigeria. A total of 57 fields, spread across onshore, swamp and shallow water, are on offer. This development was hinged on the local content initiative of the federal government of nigeria whose main objectives are the. Confusion over bid rounds for 57 oil fields the guardian. Issues in the development of marginal oilfields in nigeria. Fg flagsoff 2020 marginal fields bid round department. Legal framework for the operation of marginal fields.
Economic evaluation of nigerian marginal oil and gas field. Fatona 3 posited that multiple taxations have rendered the marginal business unattractive in nigeria and is a serious threat to the smooth operation of marginal. Identify the opportunities in the emerging marginal field sector overview of the nigerian oil industrythe regulatory framework the regulatory framework of the industry is embodied in several legislations, regulations, guidelines and policies. Examining the legal and regulatory framework on marginal. In 2003, twentyfour marginal fields were allocated to thirtyone 31 indigenous companies as part of the marginal fields licensing around. Acts and regulations department of petroleum resources. Marginal oil field development was introduced in nigeria with the objectives of. The provisions or these regulatio is shall apply to all marginal field opera in nigeria.
June 2020 this is a property of the department of petroleum resources. Launch of oil and gas production volume and vessels movement systems one of the major challenges facing the government has been lack of adequate and reliable information about the average crude oil and gas production levels. Marginal fields in nigeria marginal fields in nigeriaogbele field, which was negotiated prior to the introduction of the mfdp and is operated by niger delta petroleum resources limited ndpr, came on stream in 2005. Any company that has an oil prospecting licence opl can legally search for oil and operate on an oil field in nigeria. The 161 successful bidders emerged from a pool of over 600 indigenous oil companies that jostled for the 57 marginal fields in the process that commenced in june 2020. Suffice to mention that out of the 24 fields, seven 7 are currently producing, contributing approximately 1% of nigeria s daily oil production. The petroleum act of 1969 with its amendments prior to decree 23 of august 1996, prevented access by nondiscoverersowners to undeveloped or marginal fields. Marginal oil fields as defined in nigeria are oil fields or wells that are nearing the end of their commercial life and whose production rates are lower than 10,000 barrels per day. In spite of production from these marginal oil fields in 2014 was 2. Otakikpo and ubima fields were awarded to green energy limited and allgrace energy limited respectively in 2010. Accordingly, each partner would report its revenue based on its financial interest in the field until post cost recovery. A marginal field is a field located within an area.
The directorate of petroleum resources dpr has denied that it issued any guidelines to potential investors willing to participate in a marginal fields bid round. Economics of nigerian marginal oil fields identifying high impact. Subsequently, this announcement was affirmed by other officials in the oil and gas industry. An engineering economic technique for valuation of the viability of marginal oil and gas fields project in nigeria using financial simulation analysis was adopted by 18. Brazil, nigeria adopted the marginal fields programme mfp allocating marginal oil and gas fields to nigerian enterprises. Should the bidding rounds be conducted, 56 marginal fields would be up for bidding and it would mark the first national bidding round for marginal fields since 2003, and the second in the history of nigeria. To assess the role of technology in evaluating the profitability of marginal oil fields. Specifically, marginal fields shall have some or all of the following characteristics. Nigeria awards 57 marginal oilfields to 161 bidders arise news.
Dpr defines a marginal field as a discovered resource that has been left unattended for more than 10 years. There is a reported huge reservoir of marginal oil fields in nigeria conservatively estimated. Pdf the federal government of nigeria initiated the development program of the marginal oil field to increase production, reserves. This indicates that the deeper into water the higher the minimum recoverable reserves. Jun 04, 2020 nigeria s department of petroleum resources dpr announced on 1 june 2020 the launch of a new marginal field bid round. This is as a even though over 183 of these marginal fields have been result of challenges faced by marginal field operators such. The development of marginal oil field in nigeria has now become an important strategic issue. The federal government of nigeria recently announced the second marginal field licensing round following which, the.
The parties shall endeavour to reach an agreement within 90 days. Specifically, marginal fields shall have some or all. Nigeria denies publicized 2020 marginal field bid round. By 2014, nine marginal field operators were contributing about 2. Nigerian marginal oil fields knots in funding uba capital. Jul 09, 2020 legal framework for the operation of marginal fields in nigeria sefton fross to view this article you need a pdf viewer such as adobe reader. Legal framework for the operation of marginal fields in nigeria. This study aims to examine the factors that are particularly catalytic in the development of marginal field. Examining the legal and regulatory framework on marginal oil. Apr 05, 2021 an investors guide to marginal oil field acquisition prepared by the government says nigeria has an estimated 2.
Success factors for marginal oil field development in nigerdelta. Objectivesat the end of this session, participants should be able to. Nigeria s federal government has announced the conclusion of the bid round for the award of 57 marginal oilfields, won by 161 of the bidding companies. Nigeria awards 57 marginal oilfields to 161 bidders. Marginal field development in the prolific niger delta environment has. Applicable to investors and operators guidelines for the award and operations of marginal fields in nigeria code. For example the problem of multiple taxations by local, state and federal government is affecting startup of the asset being developed by marginal field operators in the country. Marginal oilfields are nonproducing fields that are held by the multinational oil companies. The offer opened a number of opportunities to local and regional industry players while it contributed to increase the countrys oil output and promoted indigenous participation in petroleum. Marginal field operations the real problem, and where the. Seplat also has a 40% nonoperated working interest in opl 283 marginal field area pillar. They used both systematic and purpose specific gas field development geological and reservoir information to model the flow plan that would be cost effective and efficient for of fluids from reservoir to.
An opl is the first ticket to finding useful oil fields. The federal government of nigeria awarded 30 marginal fields out of the available 183 in order to grow more reserves of petroleum assets and encourage the participation of local companies in the upstream sector. While noting the dearth of local technical expertise, given decades of isolated iocs participation in the. The first marginal field bid round was in 2001, following which 17 licences were awarded to sole operators and. In nigeria, reference to a marginal field is usually a reference to a field which may or may not have the technical characteristics of a marginal field that has been discovered by major international oil companies iocs who have not developed the field for more than 10 years. Movido bid for 2 marginal fields in 2001 and was awarded the ekeh field in 2003 following the technical and commercial bids. Jun 11, 2020 a marginal field is defined in the guidelines as any field that has been discovered and has been left unattended for a period of at least 10 ten years, from the date of first discovery, or such field which the president 1 may from time to time identify as a marginal field. The overall effect is to cede such area field from the original oml holders to the recipient of the marginal field award. This article examines the legal framework relating to marginal fields in nigeria, as well as issues to consider when investing in marginal fields. Interestingly, recent success stories and the track record of these experienced locals in translating reserves to cashflow is steadily improving the appetite of local banks for marginal field financing, just as local capacity. Production is predominantly from seven fields, namely amukpe, oben, okporhuru, ovhor, orogho, sapele and sapele shallow, and the partners aim to bring additional fields onstream in the future. Fg flagsoff 2020 marginal fields bid round nigeria s precarious economic situation may lighten up pretty soon as the department of petroleum resources dpr yesterday announced the commencement of marginal fields bid rounds for 2020. Production optimization in a marginal field through established.
Jul 22, 2020 nigeria s government, through the department of petroleum resources dpr, recently launched its first marginal field bid round in almost 20 years. This study aims to examine the factors that are particularly catalytic in the development of marginal field in. An investors guide to marginal oil field acquisition in nigeria. Nigeria marginal fields on offer 20 licensing round terrain swamp land shelf swamp shelf shelf swamp swamp land swamp land swamp shelf swa m shelf shelf shelf shelf 2p oip mmbbl dpr 36. To ensure the sustainable development of nigeria s oil and gas resources across the value chain for our stakeholders through effective regulation, while entrenching world class professionalism, accountability, and transparency. Legal framework for the operation of marginal fields in. Sole risk and marginal field operators to file returns on the. Apr 05, 2021 marginal oil fields in nigeria can be categorized into five based on surface terrain and the typical range of minimal recoverable reserves required for profitable production as follows. There are estimated to be about 183 such fields in nigeria, with an. More than 66% of the marginal fields have not started production more than 10 years after the. An investors guide to marginal oil field acquisition in.
The firs disclosed that it is a misconception that registration for income tax is different from. It is recommended that the best route for marginal field development is to forge. Marginal fields may only be operated on a sole risk. This is the last process on the marginal fields bid round exercise, whereby the leaseholder and the marginal field winners shall promptly enter into negotiations regarding the terms and conditions of the farmout agreement. The first marginal field bid process in nigeria started in 2001 and resulted in the award of 24. Huge reservoir of marginal oil fields exist in nigeria conservatively. Operation of marginal fields in nigeria an overview.
What it takes to get a marginal oil and gas field in nigeria. The process of registration, application and submission of technical and commercial bids is online via the marginal field bid round portal marginal. Fiftyseven marginal fields have been made available, being a mix of. Only companies incorporated in nigeria that are 51% nigerian owned are eligible to bid and applicants should not bid for more than one field. The petroleum amendment decree no 23 of 1996 is the basis of marginal field development. Ekeh field development operators of marginal field. To be a leading regulator in the oil and gas sector mission. Marginal fields operations fiscal regime regulations 2005 septembe. The federal government of nigeria in a bid to promote indigenous companies participation in the oil and gas sector, and to grow the nations. The fiscal provisions stated above supersede any other fiscal terms existing for marginal field operations in nigeria. Sep 10, 2020 many of these fields are, however, often abandoned by top exploration companies who consider them not profitable enough for development. Sole risk and marginal field operators to file returns on. Economic evaluation of nigerian marginal oil and gas field using. Ekeh field development operators of marginal field ekeh oml 88.
Below are the highlights of the issues raised and our comments thereon. Jul 10, 2020 the fiscal provisions stated above supersede any other fiscal terms existing for marginal field operations in nigeria. Jun 22, 2020 once there is designated marginal field, that area is farmedout from the wider oil mining lease oml area. The critical success factors for marginal oil field. According to wood mackenzie report since 2004, only ten of the 24 marginal fields awarded in the round have been brought on stream or are under development and account for just 2. Identify the opportunities in the emerging marginal field sector overview of the nigerian oil industrythe regulatory framework the regulatory framework of the industry is embodied in several legislations, regulations, guidelines and. Pdf the critical success factors for marginal oil field. In 2003, nigeria had a bid round for its marginal field with 24 licenses awarded to 31 companies, some as sole operators and others as jointventures. In addition, paragraph 3 of the marginal field regulations permits the commingling of fluid production from two or more reservoirs, following the approval of the department of petroleum resources, and based on the compatibility of the reservoir fluids and pressures. Nigeria s marginal oilfields bidding round on 1 june 2020, the department of petroleum resources dpr or the agency announced the commencement of the marginal fields bid round for 2020. Guidelines for the award and operation of marginal fields in nigeria can also be downloaded from the submission portal.
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