In spite of the crash in crude oil prices, the Federal Government says it will auction marginal oil fields later this year.
Kyari, however, said the federal government would put on hold for now conducting any major licensing round because of the current market realities that might dampen foreign investors.“Marginal fields by their very nature, require very small-scale investment. Countries normally do this (licensing round) to encourage local participation and this local participation are usually funded by local borrowings because the scale of investment is not huge.

“So, you can typically do a marginal fields bid round even when oil prices are low because their costs of production are usually lower; they don’t need huge capital outlay. It is possible to do a marginal fields bid round this period,” the NNPC GMD said.
Kyari ruled out the possibility of conducting “a substantive, full-scale licensing round, where you require foreign investments”.

He explained: “This is not the best time to call foreign investors to participate in any bid round. The licences will be priced very low, and even the appetite will be very low.
“You are not likely to end up with the big players when you start a bid round under very low crude oil prices.
“I know we will go ahead with the marginal fields bid round, but will have to delay the substantive bid round to a later date.”

In his presentation, the Director-General, Budget Office of the Federation, Mr Ben Akabueze, announced that government would accelerate marginal fields licensing and renewal of expiring oil mining licences as part of measures to augment revenues.

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