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Published On: Fri, Dec 12th, 2014

FG to revoke non-performing oil field licenses

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From Ayodele Samuel, Lagos

The Federal Government yesterday threatened to revoked non-performing oil field operators’ licenses by March 2015.

The Director, Department of Petroleum Resources (DPR), Mr George Osahon while speaking at a one-day marginal field sensitization workshop in Lagos said that about 28 marginal fields had been awarded since 2013, but 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.

He said that the increase reserve and production should be the prime objective of the industry stakeholders.

According to him, 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.

“Unless reasonable commitments are made by the operators to ascertained by government.

“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 said that in spite of the operators’ challenges such as funding, infrastructure, insecurity, community issues, technical capability, ownership and partnership tussles they can still engaged professionals to advise them on best way to commence operations.

According to him, the marginal field licenses were issued ten years ago with the proviso 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.

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.

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 & 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 – is the operator of the Ebondo/Obodeti Marginal Field.

 

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