Page 8 - AfrOil Week 06 2021

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However, the news agency noted that Nigerian Nigerian authorities have been trying to pass
authorities were reacting to the fact that many a comprehensive new oil and gas law for more
foreign companies are cutting investment budg- than 20 years, without success. Buhari submitted
ets after sustaining losses in 2020. a draft version of the PIB to the National Assem-
Kyari, for his part, insisted that changes to the bly last August, saying at the time that he hoped
contracts in question were necessary. NNPC is legislators would approve it before the end of
offering international oil companies (IOCs) a 2020. They failed to do so but are still working
choice between negotiating revisions now or to secure passage within the first half of 2021. ™
accepting the terms that will be applied once the
Petroleum Industry Bill (PIB) is passed later this
year, he declared.
He also acknowledged that NNPC’s stance
might lead some IOCs to withdraw from Nige-
ria. “No company will invest where they cannot
get the appropriate margin,” he told Reuters.
“We’re very conscious of the fact that people
have choices, companies will make choices to
leave countries when they have to.”
According to previous reports, the two
houses of Nigeria’s Parliament have already
passed the PIB in the first and second readings
and hope to wrap up the third reading before the
end of April. If they meet this deadline, Presi-
dent Muhammadu Buhari will be able to sign
the legislation into law in May. NNPC’s head says changes must be made to IOCs’ contracts (Photo: Shell Nigeria)

DPR sees marginal fields

bringing in at least $500mn

NIGERIA NIGERIA’S Department of Petroleum fields bid round, we reviewed the first and learnt
Resources (DPR) has said it expects to earn at from the experience. We had 24 fields awarded
least $500mn from the ongoing Marginal Oil- [during the first round] in 2003. Unfortunately,
field Bid Round. only 13 out of the 24 [seem] to be producing,”
Sarki Auwalu, the director and CEO of the he stated.
DPR, said last week that the auctions might The current Marginal Oilfield Bid Round
bring in even more money. “What we did inter- is only the second of its kind. It is designed to
nally is to look at the competent person reports expand the capacity of Nigeria’s domestic oil
[CPRs] and objectively estimate the average sig- and gas operators. DPR launched the auctions,
nature bonus on a field. We estimate to have not which cover 57 licence areas, on June 1, 2020.
less than $500mn, which is on the conservative More than 600 companies applied for pre-qual-
side,” he stated during a television interview. ification to take part in the bidding process, and
Auwalu went on to say that DPR would not the department shortlisted 161 of them in Janu-
be making any discretionary awards, but he also ary of this year. ™
noted that the contest was due to be wrapped up
before the end of the first quarter of 2021. The
government will permit the winning bidders to
pay the cost of acquiring their permits in naira,
the national currency, rather than in a foreign
currency, he added.
Additionally, he stressed that the auctions
were proceeding well. “We are avoiding any
third-party interference, since [the] govern-
ment really believes in us and we believe the
investors are having confidence in the process,”
he commented.
He indicated that he expected the current
round of auctions to be more successful than
its predecessor. “When we started the marginal The Marginal Oilfield Bid Round covers 57 blocks (Image: PGS)

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