DPR silent on idle marginal fields’ licence revocation

25 September 2015, Lagos – The planned revocation of the licences of undeveloped marginal fields in the country by the Department of Petroleum Resources appears to have been postponed indefinitely.

Otakikpo Marginal Field in OML 11.

Otakikpo Marginal Field in OML 11.

The revocation date, which was earlier fixed by the DPR for March 2015, was not adhered to, and feelers from the industry indicate that the regulator, the DPR, is not ready to withdraw any licence awarded to the operators of the undeveloped fields.

When our correspondent contacted the Head, Public Affairs, DPR, Mrs. Dorothy Bassey, she wrote in a text message that there was “no update,” and refused to entertain further enquiries by our correspondent.

The immediate past Director of the DPR, Mr. George Osahon, had warned the operators that the marginal fields awarded in 2003, which had become non-performing for 10 years, would be revoked in March this year.

The failure to revoke the licences has raised suspicion as oil and gas licences elapse after 10 years if undeveloped and are reserved for future licensing rounds.

Osahon had said that of the 30 licences, five were awarded under controversial discretionary basis, of which only Oriental Energy, owner of two fields – Okwok and Ebok; and Niger Delta Petroleum Development Company, owner of the Ogbelle field, are engaged in active production.

He also explained that both the Okwok and Ebok fields were awarded to Oriental Energy to compensate the company for losing part of its OML 115 to Equatorial Guinea due to boundary adjustment.

The former DPR boss had explained that the Niger Delta Petroleum Development Company got the Ogbelle field in 2010; while Otakikpo and Ubima fields were recently awarded to Green Energy Limited and Allgrace Energy Limited, respectively based on their commitments to fund three pilot projects through the Public Private Partnership arrangement.

The PUNCH had reported in January this year that in the face of dwindling crude production figures and dramatic fall in prices, 97 oil fields belonging to the country were currently not producing.

The country has 315 oil fields in total, but out of these, only 218 are currently productive with the rest lying idle.

The upstream arm of the Nigerian petroleum industry has 85 operating companies, but only 33 are production entities, according to figures obtained from the DPR.

Nigeria currently has 2,800 oil producing wells, with the number of flow stations/plants put at 130.

The DPR also puts the amount of oil blocks awarded at 170; of which 68 have Oil Prospecting Licences, while 102 are Oil Mining Leases.

Osahon had said infrastructural deficiency, insecurity and communal unrest, ownership and partnership problems, contracting and procurement issues, and technology deficit were the major factors stalling the development of most of the oil fields.

Worried by the falling oil/gas reserves, the DPR claimed that it recently developed short and medium-term strategies to boost the reserves, while also coming up with long-term strategies targeted at sustaining the reserves.

According to the agency, there are also plans to undertake more seismic data coverage for better regional and basinal studies, and drilling of exploration wells in the short to medium term.

The agency said it was working towards active exploration drilling and drilling for deeper players in the short to medium term.

  • Punch
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