Three weeks after the Department of Petroleum Resources (DPR) announced the marginal oil bids, response to the announcement has been overwhelming according to new reports, with over 300 companies reportedly bidding for the marginal oil fields. This is despite a Federal High Court restriction that ordered the Federal Government to hold selling and accepting bids for some marginal oil fields.
The overwhelming bids showed that the court order didn't dampen the interest of investors in the marginal field which is an oil field that has not been developed for more than 10 years, but discovered by major international oil companies (IOCs) - operating within the country - during an exploration of larger acreages.
The Industry Has Been Craving For It
The DPR had announced that 57 fields, which are located on land, swamp and shallow offshore terrains, are available for bids. According to the Federal Ministry of Petroleum Resources, over 500 companies were likely to have applied within the 3 weeks. The huge figure shows that the market has been craving for it for a while now, as the last time such bidding was opened was almost 20 years ago.
Almost two weeks ago, DPR needed to extend the registration deadline for interest to bid for the marginal oilfields by a week more to June 21. Although, the schedule for the bidding process shows that August 16, 2020, is the last day for the submission of technical/commercial bids.
What's The Schedule For Bidding Process?
According to the schedule, the following will occur from June 21 to August 16; Evaluation of submission and preparation of report, June 22 to July 5, Announcement of Pre-Qualified Applicants and Issuance of Field Teasers by July 5, Data Prying, Leasing, Purchase of Reports from July 6 to August 16, Payment of Application and Bid Processing Fee and Submission of Technical and Commercial Bid from July 6 to August 16.
Speaking on the intensity of the application process, Nairametrics quoted an unnamed retired reservoir engineer, "It would take around $150,000 for a qualified application to get all the way to signature bonus and a number of Nigerian businessmen. Once you get to the point of being qualified and all you have to pay is the signature bonus, you are there. There is the impression that a marginal field license has conferred on you some entitlement."