Nigeria Moves to Forestall Marginal Oilfield Litigation

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     …Litigations already trailing 2 oilfields revoked in April
     …DPR says it has learnt from past mistakes

Prompted by speculation about potential malpractices in the planned marginal oil fields’ allocation, Nigeria Department of Petroleum Resources (DPR) has adopted procedural changes to avoid the kind of legal problems that bedeviled the previous bidding round.

Early in June, Nigeria launched its first bidding round for marginal fields, which are smaller oil blocks usually left for, and allocated to local operators to develop, in nearly 20 years. In going into option, the government of Nigeria believes the marginal allocation will boost oil output and bring in much needed revenues.

The DPR, the petroleum regulator, has said none of the fields being awarded faced legal issues, but Reuters reported yesterday that law courts have already blocked two marginal fields that were revoked in April from being included in any new licensing round.

The international news agency said other legal challenges were expected from those holding 11 licences revoked in April.

The DPR’s director, Auwalu Sarki, said the previous round was “fraught with litigations and other challenges,” which hampered the development of some of the oilfields, but stated that the authorities had learned from previous mistakes.

“This time around, our awardees will be credible investors with technical and financial capability,” Sarki said on Monday while addressing the Africa Marginal Oilfield and Independent Producers Webinar Conference, monitored by Reuters.

“There is also the Post-General Award Conditions. This deals with transfer of interest post award. It means awardees cannot transfer more than 49% interest to another party post-award,” the DPR boss stated.

According to him, the conditions also allow the petroleum minister to withdraw the interest of a party that fails to meet its obligations in terms of joint awardees.

Chibisi Ohakah, Abuja

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