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The Nigeria government introduced Marginal Field program in 2001 with the aim of opening up the upstream sector of the oil and gas industry to wider indigenous participation - marginal field operators.
And to create a strong industry that positively impact the capacity of indigenous exploration and production companies to contribute to Nigeria’s oil production reserves.
The essence of the marginal field as established by the government is to promote local participation of oil and companies in the upstream sectors – marginal field operators.
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One of the important rules for the applications of the marginal field is that it is only the indigenous oil and gas companies within the country that can apply for it. However, local industries are permitted to have foreign technical partners with equity participation that must not be more than 40%.
A marginal field operator is a person, individual, company, entity or trust responsible for the management and day to day of one or more crude oil/natural gas wells existing in a marginal field.
The first marginal field operators were for the very first time allocated to 31 indigenous companies in Nigeria in 2003 as part of the marginal field licensing round.
Among these 31 companies that were verified as marginal field operators, seven of them contributed rough 1% of Nigeria’s daily oil production. These companies are;
Britannia – U Group: the Britannia – U Company operate as a sole risk company licensed in the Ajapa field (OML90), which was farmed out by chevron Texaco.
The company has verified reserve of 6.69 million barrels and maintains a daily production of 2,200 barrel of oil per day.
Platform Petroleum and New Cross Petroleum Limited: Platform Petroleum Company is a joint venture that operates a 60:40% with new cross petroleum limited in the Egbaoma field.
The field has a verified reserve of 65.77 million barrel and daily production of 1,899 barrel of oil per day.
Waltersmith Petroman Oil Limited & Morris Petroleum: Waltersmith operates the Ibigwe field in a 60:30 joint venture with Petroman oil limited and Morris petroleum respectively. The field has a proven reserve of 2.9million barrels and a daily production of 3,700 barrels of oil per day.
Midwestern Oil: The Midwestern operate as the Umusadege field in a 70:30% strategic partnership with Suntrust oil company and Mart energy.
Midwestern was given 70% interest in this field, while Suntrust oil company and mart energy hold the remaining 30% interest. The field has a verified reserve of 49.86 million barrels and a daily production of 15,000 barrels of oil per day.
Pillar Oil: pillar oil company operates as Umusati/Igbuku marginal field located in OML 90 under a sole risk license, the field has a proven reserve of 8.9 million barrels and a daily production of 2,700 barrels of oil per day.
Enegia LTD: the company is the operator of the Ebondo/Obodeti marginal field under a 55:45% joint venture with Oando.
The company’s estimated proven reserve is at about 7.96million barrels and the total daily production of 8,500.
Frontier Oil: The Frontier oil is the operator of the Uquo field under a joint venture with Seven Energy. It was farmed out from Total’s OML 56.
The Uquo field has a proven reserve of 177.75 million barrels and produces 35 million cubic feet per day.
After the gratification of marginal field operators to these aforementioned oil, gas and energy companies in 2003, there have been lots of changes in the field.
The latest marginal field operators that are verified are granted on June 1st 2021 where 57 marginal field operators were verified as revealed by the Minister of Petroleum Resources, Timipreye.
The 57 marginal field operators offered span:
Prior to the confirmation of these 57 marginal field operators, The Department of Petroleum and Resources had opened an unlikely bidding for the role for over a year at the global pandemic apex.
Despite of serious reservation about the success of the bidding round due to the impact of covid – 19 on economic activities and global finance and oil market, the Department of Petroleum and Resource proceeded with the 2020 marginal field bidding round.
It was said that, at least half of the successful marginal field investors accepted the offers and as well paid their signature bonuses.
The government had an expectation of signature bonuses on the new acreages to amount to $500 million.
In a ceremony where letters were presented to the winners of marginal operator’s field role in Abuja on May 30th, 2021, the Director of the Department of Petroleum and Resources Mr Sarki Auwalu said.
There were a total of 591 firms that had expressed their interest out of which 540 were pre-qualified, while 482 were bids submitted by 405 applicants.
He stated that: “Out of the 161 companies shortlisted as potential awardees, 50% have met all conditions and are eligible for awards today. Other deserving applicants are set to be extended opportunities.
One of the key conditions that qualified the companies within is the payment of signature bonus for these fields.
However, neither the Petroleum Minister nor the DPR Director provides a specific figure of income that was generated from the signature payment made by these companies. However, the government is estimated to have received at about $260 million as signature bonuses.
Currently the lists of marginal field operators in Nigeria are as follows;
As revealed by the DPR chairman, all the licensed oil, gas and energy industry are all indigenous companies.
NIPCO which was owned by Indian-Nigerian businessmen purchased Mobil Oil Nigeria PLC which was the country’s largest fuel distributor in few years back and MRS which is related to popular billionaire Dantata family acquired the downstream assets of multinational chevron oil including the icon and Texaco fuel retailing brand.
These are the marginal field operators.
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Published origninally on 25th Mar 2022 13:16:47
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