By MICHEAL EBOH

Marginal fields’ operators in Nigeria’s oil and gas sector have continued to show their lack of capacity to fully contribute significantly to the country’s crude output, as seven out of the 29 operators accounted for only 2.56 per cent of the nation’s crude production in January 2014.

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Data obtained from the Nigerian National Petroleum Corporation, NNPC, revealed that the seven companies produced 1.734 million barrels of crude, compared to Nigeria’s total crude production of 2.183 million barrels in January.

The highest producers are:

         Oriental Energy -1.054 million barrels

         Midwestern Oil and Gas -352,458 barrels

         Energia Limited 91,246 barrels, and,

         Waltersmith – 85,880 barrels per day.

The least producing firms were:

  Pillar Oil – 43,774 barrels

         Platform Petroleum 50,856 barrels, and,

         Niger Delta Petroleum 55,408 barrels.

Brittania-U, despite been listed on the production schedule, did not record any production in the month under review.

An industry journal, Africa Oil and Gas Report, had a couple of weeks ago, disclosed that as at December last year, 12 companies out of all the companies awarded the fields since 2003 are yet to commence production.

The journal attributed the inability of the operators to commence production to a number of factors, ranging from fraud allegations, and funding challenges to distractions.

The companies, according to the journal are:

         Guarantee Petroleum/Owena, owners of the Ororo field;

         Bicta Energy Ogedeh field;

         Sogenal LimitedAkepo field;

         Bayelsa Oil, Atala field;

         Movido, Ekeh field;

         Goland Petroleum, Oriri field; and,

         Eurafric, the Dawes Island field.

Others are:

  Network Exploration and Production Company for the Qua Iboe field;

         Universal Energy, Stubb Creek field;

         Associated/Dansaki, Tom Shot Bank field;

         Green Energy, the Otakikpo field; and,

         All Grace, operator of the Ubima field.

Mr. Bayo Olowoshile, General Secretary, Petroleum and Natural Gas Senior Staff Association of Nigeria, PENGASSAN, also expressed concern over the low productive capacity of the marginal fields.

He attributed the trend to the fact that a number of the indigenous investors are financially handicapped and may not be able to pool the necessary resources to fund the acquisition and production.

He said, “In reality, the indigenous investors are still far from pooling that resources for the oil and gas business, and as such, most of them act as fronts or proxy for the real foreign owners, who truly buy the asset and pay commissions to indigenous owners.

“Even though bidding is believed to be influenced by the powers that be, the current challenge is funding the bids, paying the signature bonuses and financing the exploration and production processes.”

“Oil production is highly technical and capital intensive. And it goes with a lot of risks, especially as it affects the investment layout. More so, access to the colossal amount of funds required for oil and gas business is becoming a big challenge going by the difficult environment that Nigeria poses to investors and financiers from the outside world who want to partner with the indigenous owners and operators of marginal field.

Speaking in the same vein, Mr. Patrick Okigbo, Principal Partner at Nextier Capital Limited, an investment and multi-competency advisory firm, focused primarily on agriculture, power and petroleum, advocated a change in strategy in the sale of the marginal fields in the near future.

According to him, the oil licensing rounds and sale of marginal fields should not be on ad-hoc basis, they should be tied to a comprehensive, long-term, economic development strategy.

“There should be an overarching strategy for managing Nigeria’s natural resource base for current and future generations. The Nigerian government should tie every licensing round or sale of marginal fields to this development plan,” he said.