Orient Energy Review

Nigeria to Set Up Agency For Oil Bid Rounds

Nigeria to Set Up Agency For Oil Bid Rounds Orient Energy Review

The Nigerian government has concluded plans to set up an agency to be known as National Acreage Management Strategy (NAMSTRA) before the end of this year. The agency will be responsible for putting in place strategies to determine and manage the nation’s periodic bid rounds in the oil and gas industry.

Director of the DPR, Mr Sarki Auwalu, who dropped the hint at a webinar, stated that setting up the agency is necessary given the role of the marginal fields to national revenue and economic development, and the fact that the last bid round was about 17 years ago.

He said that there was a need to determine Nigeria’s potential oil basins and when to call for bid rounds, a good reason for the country to be competitive within the sub-Saharan region.
He stated that NAMSTRA will have enough in its hands given the nation’s available seven basins comprising the Benue (North-central), Sokoto (North-west border), Chad (North-east), Bida (Central, along the Niger valley), Dahomey (South- west), Anambra (South-east) Basins and the Niger Delta (South coastal), including the deep water.

“The establishment of NAMSTRA would help the country to decide the next bid round after assessing the commercial viability of the basins.

“NAMSTRA will also help to determine how prolific such basins will be in a bid round process,” he stated.

He added that no fewer than 10 companies had sought for each of the marginal field put out for bid this year, which translates to about 600 companies in all bidding for the 57 oil fields. “First I will say that we have really witnessed an increase in bidders after the extension of the deadline to June 21. There has been almost 30% increase in participation.

“If you are making a bid or auctioning any oil field, you need to get 10 people per field really going after the field. We have 57 fields and we have over 600 companies. So, we can say that we are celebrating success so far. After the extension, we are moving according to schedule and now we are in the phase where we do pre-qualification for the bidders to apply. Everything is going perfectly.” He said .

However, the DPR director said oil and gas companies that have become successful in the 2020 marginal fields bid rounds had just two years to deliver their first oil.

According to him, the federal government expects bidders to have both funding and technicalities already prepared for production and should launch into exploration immediately upon winning, adding that the bidding process is electronically-based.

Auwalu explained that the federal government will give the winners support in terms of providing advisory roles on how to meet their target. “Already, we have 16 marginal field operators producing in the country, and we have seen how they went about it. So, the government is prepared to help winners succeed by giving them aggressive work implementation tactics,” he said.

The webinar was organised by the Nigerian Association of Petroleum Explorationists (NAPE), with the theme: “Nigeria Marginal Field Bid Round: Implications, Challenges and Opportunities”.

Chibisi Ohakah, Abuja