FG to revoke licenses of non-performing marginal field operators

By Anayo Korie  / Ag Energy Editor


The Federal Government has threatened to revoke the licenses of non-performing marginal field operators by March 2015 and hand it over to other serious minded operators as part of the plans to boost Nigerian oil output. Mr. George Osahon, Director, Department of Petroleum Resources (DPR), disclosed this at the one-day marginal field sensitization workshop held in Lagos over the weekend.

Osahon explained that about 28 marginal fields had been awarded since 2003, adding that few fields only are  operational, saying that the workshop is to sensitize  operators on the need to commence operation in their various fields.

According to him, the Federal Government will not hesitate to revoke licenses of those non performing marginal fields operators which had failed in the last 10-years of awarding the contracts, adding that boosting reserve and daily production is the prime objective of the industry stakeholders for now.

‘Government has been concerned about the decline in the country’s production level, which calls for urgent action. The workshop will help marginal field operators to move ahead of the investment profile,” he said.

Osahon listed funding, infrastructure, insecurity, community issues, technical capability, ownership and partnership tussles as challenges confronting field operators, advising them to look for best ways to commence operations.

According to him, the marginal field licenses were issued ten years ago with the condition that holders who failed to produce within five years would have their licenses revoked.

“At the end of the first five years, however, the licenses were reviewed, and the tenure extended by another five years, that extension will expire in March 2015.

“Only about nine of the 24 operators that were licensed are currently producing, contributing 2.4 per cent of the country’s crude production of 2.5 million barrels per day.

“The awardees have been bogged down by series of problems including infrastructure deficits around the fields; lack of industry experience; high interest rates on loans; poor oil metering tools and insecurity,” he lamented.

In 2003, twenty-four marginal fields were allocated to 31 indigenous companies as part of the marginal fields licensing round, while additional four was awarded after 2003 to make it 28-fields.

The companies include Brittania-U, which is the operator of a sole risk license in the Ajapa field (OML90), Platform Petroleum and New Cross Petroleum Limited in the Egbaoma field (OML 38). Waltersmith Oil Limited and Morris Petroleum in Ibigwe field (OML 56) were also on the list.

Others are Midwestern Oil, which operates the Umusadege field (OML 56); Pillar Oil operates the Umusati/Igbuku Marginal Field located in OML 56 under a sole risk license; Frontier Oil is the operator of the Uquo field under a JV with Seven Energy; and Energia, the operator of the Ebondo/Obodeti Marginal Field.

Source : Independent

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