Marginal oil field bidders uncomfortable with guidelines

Interested bidders who are uncomfortable with the marginal field bid guidelines are piling pressure on the Presidency to prevail on the Department of Petroleum Resources, which is overseeing the exercise on behalf of the government, to review them.

The investors are said to be uncomfortable with portions of the guidelines which reduced the tenure of asset holding, which is now two years, as against five years in the previous exercise.

In the 2003 bid round, investors were allowed to hold the assets for five years. Many of them are still inactive on the assets they won, for want of technical and financial capacity.

One of the most contentious issues agitating the minds of some of  the investors is the statement allegedly made by  George Osahon, the director of  the DPR, to the effect that considerations would be given to new investors that are just coming into the business.

Some of those that already have assets and had thought that the new exercise would give them the opportunity to grow their businesses by getting more to their portfolios, are uncomfortable with this decision. Some of them are said to be pulling strings in the corridors of power, to ensure that they allowed to participate.

An operator of a marginal oil field, who does not want to be identified, said if they are not given more assets, it would be difficult for them to grow. He therefore urged the DPR to consider its stand on the issue.

The timeline is said to also be a source of concern to the investors, as some of them claimed it was not stated in the guidelines.

The reference the guideline made as regards time line is to the effect that the overall process is not expected to be longer than six months, from the date of announcement to contract signing with the leaseholders. It however stated that adequate time will be allowed for data prying and submission of applications.

On evaluation and selection, the guideline stated that submission requirements for field-specific bids shall be made available to pre –qualified candidates for viewing and download from the DPR website, after the pre-qualification exercise.

It did not specifically state for how long  investors can pry the data.

The time table for the bid is expected to be out this month , according to the director.

The controversial listing of one of the country’s major oil producer’s in the schedule of the marginal oil fields bid rounds appear to be have been responsible for delay in the release of the timetable for the bid process.

The timetable for the process had been expected for the past three months, following the announcement for the bid process by Diezani Alison-Madueke, minister of Petroleum Resources.

However, investors who have eagerly been waiting for the timetable for the next marginal field bid round may soon heave a sigh of relief, as the Department of Petroleum Resources(DPR) promises to release the timetable this month.

With the release of the timetable, investors would have the opportunity to obtain more information in respect of the assets they intend to buy, and also on the date the bid itself would actually take place.

George Osahon,director of the Department of Petroleum Resources (DPR) who disclosed this to BusinnessDay, said the issues delaying the release of the timetable are expected to soon be resolved.

He said the time table would be released this month, but was not specific about the exact date.

He explained that he did not want a situation in which some of the fields would be isolated because there were issues around them, while the others were put on offer. “It would look as if there is an under the table dealing, and people may start thinking that they have given  them to some people”.

He added, “I want everything to be transparent.”

Some of the international oil companies were alleged to have complained of infringement on their fields.

Even though the DPR director did not mention the IOCs involved, unconfirmed  sources said one of the companies complained  that three of its fields put on offer in it divestment programme are included in the marginal field list.

Another  company  was said to have protested that one of the fields being put on offer was located right in the middle of its operations, and that this raised environmental and security concerns.