Concerns Trail Nigeria’s Marginal Fields’ Bid Round
The Department of Petroleum Resources (DPR), have been accused of lacking transparency in the handling of the 2020 marginal fields’ bid round process. The DPR is Nigeria’s oil and gas regulatory agency.
Nigerian authorities say the target is to raise over $500 million from the bid round in terms of signature bonuses from the 57 marginal fields, which will be auctioned.
The 2020 bid round schedule, according to the DPR, is supposed to start from June 1 and till August 9, when payment of application, bid processing fee and submission of technical commercial bid will take place.
Some stakeholders and Industry players have expressed concerns that despite efforts that have been put into the works, – of which the last exercise was held 17 years ago, there are yet areas of concern arising.
For instance, there are concerns that, as in one happened in the power sector, those eventually selected may not have the cash and technical capacity to do business in the sector. Observers are seeking to know in clear terms, the pre-qualification criteria for bid selection, and how they will be weighted in selecting those that will participate at the application stage.
They also sought to know if independent agencies like the Nigeria Extractive Industry Transparency Initiative (NEITI) will be given a line of sight of how the process is handled from end to end, noting that it is important to give every participating entity a fair chance and ensure there are no loopholes, which parties can circumvent to gain undue advantage.
There also concerns if the DPR is working independently, or being manipulated by political gladiators in the ruling party. They recall that during the last bid round, a total of 24 fields were given out, with only nine operational till date and 15 abandoned due to political interference.
“Some level of transparency will be required in the assessment during the pre-qualification assessment and the assessment of the technical and commercial submissions, to ensure that only the most qualified entities with the requisite (financial and technical) capacity are selected.
“Moreover, it is unclear what the actual pre-qualification criteria are and how these will be weighted in selecting applicants that will participate at the application stage. With the large number of submissions received by the DPR at this pre-qualification stage, it is essential that only companies with the capacity and financial reach are pre-qualified with verifiable sources of funding and funding access.
“This is essential so the government also meets with its objective of achieving a production target of 3 million barrels per day by 2023, by getting these assets to production swiftly and the country earns the accompanying royalties and taxes for the respective fields.
“If these pre-qualification criterions are not strictly adhered to, it will open the door to a political crony system and insider dealing that have hitherto plagued the previous award system, thus stalling any meaningful development on the assets,” the observers said.
Chibisi Ohakah, Abuja