Sebastine OBAS
Eight months after the unveiling of guidelines for participation in a much-awaited marginal fields bid round, investors’ expectations appear to have been dashed, as there is yet no clear information on the round expected to have been concluded since May.

The ensuing lacuna has made international observers to describe the awaited exercise as a “phantom bid round”. The development is not particularly too salutary for the country’s image in view of her quest to attract fresh foreign investments into the oil and gas sector, which had witnessed sustained spate of divestments in the recent time.

Recall that the Director, Department of Petroleum Resources, DPR, Mr. George Osahon had said, “the overall process is not expected to take longer than six months from the date of announcement to contract signing with the leaseholders. He added that “adequate time will be allowed for data prying and submission of applications.”

Expert’s opinion

Industry experts argue that the development will diminish the image of the country before the international community, especially as uncertainties persist over policy tilt since the Petroleum Industry Bill, PIB, is yet to be passed.

Principal Consultant, Lonadek Nigeria Limited, Mrs. Ibilola Amao, said the country has turned into a laughing stock before the international community which is now making jest of Nigeria, in view of the poor handling of the marginal field bid round.

Specifically, she argued that the DPR needs to up its ante, saying, “We are now probably a laughing stock because of the bid round with a set timetable that seemed rather ambitious. We commenced a road show and then went silent on the existence of 31 or 29 marginal fields.”

Considering that the round was to have been concluded by March and lease winners announced in April, she added, “Today, we are nowhere near any announcement of winners. And a visit to the DPR website would confirm that with a notice to prospective bidders which states: “The modalities on the impending Marginal Field Bid Round shall soon be uploaded on this site in due course.”

“Where else in the world can this play out? She asked. “To think that many credible Nigerians were able to identify serious minded investors, invest time, effort and resources to develop strategies, plans and put agreements in place with the anticipation that a bid round had commenced, shows how far from serious we have become as a nation.”

Fields on offer
It was gathered that part of the delay might not be unconnected with the inability of DPR to successfully address some contentious issues, including the listing of some of the fields held by the international oil companies, IOCs, which they have not relinquished. Chevron and Shell are said to be the major contributors to the operation.

The IOCs are said to have complained that some of their fields have been mistakenly included among the 31 fields expected to be auctioned in the marginal field round, even as some of the fields are said to be located right inside their acreages.

About 31 fields are slated for auction, 16 onshore, while the remaining 15 are on the continental shelf. Sweecrude learnt that some of the most likely fields to be put on sale include:
*Shango, Meta, Azama, Ruta, and Oloye (OML 95 operated by Chevron);
*Uzuaku, Baniele, Ofemni, Banghan, Hughes Channel and Obuzo (Shell’s OML 11 in Ogoni, Rivers State);
*Ataramba and Irigbo in OML 42, bought last year by Kulczyk Oil Ventures from Shell;
*Igbomotoru and Okiori (OML 33, Shell);
*Kudo and Obira (OML 89, Chevron); and,
*Usoro, on OML 100, operated by France’s local unit, TOTAL.

For Chevron and Shell, the disposal of the marginal fields is the price they may have to pay to renew licences of their most prolific blocks, even as the companies insist they are not under any obligation to “relinquish some to gain others”.

For some years now, Shell has been negotiating for the renewal of its rights on OMLs 71, 72, 74, 77, and 79, on which it operates the EA field (AEI 718). Just as Chevron has been on OMLs 86, 88, and 89
A source close to DPR told SWEETCRUDE that the contentious issues are still being tidied up. “The issues surrounding some of the fields are still being addressed and I believe that before the end of this quarter, the whole thing will be resolved,” he said

He also explained that the regulatory body has promised to address these issues before releasing the time-table for the exercise.

However, one of the prospective investors in the round noted, “If these allegations by some of the IOCs are true, it means the government did not do their homework well before arriving at their numbers. But six months is enough for them to tidy up the issues, or if the issues surrounding those blocks are too complex, they should leave those controversial blocks and award others. Investors are not comfortable with the delay because it raises integrity issues.”

Political patronage
There are speculations that the non-release of the time table and lack of full disclosure of relevant information regarding the marginal field bid round, may be favouring a select group of investors. Some of the investors who have allegedly sighted the list being bandied are sceptical of its credibility.

“I am of the view that it is unfortunate that at this critical period in our life as a nation, such an important transaction is shrouded in secrecy. I am aware that the list of assets (marginal fields) to be auctioned is known only by a few people. Even the new marginal fields’ guidelines are not as well-known and publicised as they should be,” said a prospective investor in the marginal field round.

According to him, there is a strong chance that the ongoing bid round is just to compensate certain people and for the benefit of certain interests.

“For the DPR and the Ministry of Petroleum Resources to prove otherwise, they need to immediately make all relevant information publicly available. The bid rules should be posted on the ministry’s website and that of the DPR; together with fields to be auctioned. Every relevant piece of information should be made publicly and readily available and accessible. It is also pertinent that the list of bidders as shortlisted from time to time, be made publicly available,” he added.

Going by the time schedule for the application process disclosed by DPR during the road show, the list of fields, the map and application forms were to be uploaded to the website by December 14, while the submission of applications and pre-qualification was to take place over 3 weeks from the December 16 to the January 3.