Home Energy We followed stipulated regulations marginal oil fields award – NUPRC

We followed stipulated regulations marginal oil fields award – NUPRC

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The Nigeria Extractive Industries Transparency Initiative (NEITI) and the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), has clarified the concerns around the 2020 marginal fields awards.

In separate statements, two agencies explained that a recent report by The Punch Newspaper on Sunday, November 12, 2023 that quoted NEITI Report to have insinuated that the NUPRC did not adhere to its own regulations while implementing the marginal fields award, were out of context.

NUPRC in a stated signed and issued on Wednesday, November 15 by its Head, Public Affairs and Media Relations, Oliade Shonola said the narratives contained in the report by the newspaper, purportedly extracted from the 2020 NEITI Report, are incorrect and a misrepresentation of both the process and outcome of the 2020 marginal field award exercise.

“In the publication, the newspaper claimed that the Commission “did not adhere to its own regulations while implementing the 2020/2021 marginal fields’ award.

“To correct the misrepresentation and the impression it could create in the minds of unsuspecting members of the public, the Commission would like to explain the process, which represents the true situation concerning the 2020 bid exercise:

i. The 2020 marginal field bid exercise was started by the now defunct Department of Petroleum Resources (DPR) following Presidential Approval obtained to conduct the exercise. The bid exercise was launched on June 1, 2020 and a total of 57 Marginal fields were made available for bidding through a transparent online electronic bidding system.

ii. Of the number of companies that indicated interest in the bid exercise by submitting their applications within the deadline set for that purpose, five hundred and forty (540) companies were pre-qualified in line with the procedure set out in the Bid Guidelines. Ultimately, 482 out of the 540 companies pre-qualified submitted bids for the various fields on offer.

iii. At the end of the exercise and in line with existing government policy to encourage as many qualified Nigerian companies to participate in the upstream business, 161 entities from the 482 pre-qualified bids were offered marginal fields and given a deadline to make signature bonus payments. A number of these entities were offered fields on a joint basis.

The Commission, upon inception, had to embark on extensive stakeholder engagements with the successful bidders to resolve the many issues arising from the policy of jointly awarding some of the fields to several awardees. These engagements were held in both Lagos and Abuja.

iv. In the event where those offered fields in the exercise were unable to fulfill their obligation to pay the signature bonus within the time frame specified, the Commission sought and obtained the approval of The Presidency to re-award those not paid for to other entities who participated in the bid exercise but who were not offered any fields during the initial stage. These later awards were premised on the condition that considered companies present clear evidence of both financial and technical capability.

v. At the end of the exercise, a total of fifty five (55) fields were successfully awarded and paid for.

vi. Other than the provisional award letters issued to qualified bidders (which contain the terms and conditions of the award including the signature bonus payable), in all cases, final letters of award were only issued upon payment of 100% of the signature bonus by or on behalf of the awardee,” the statement read in parts.

Debunking the claim by the newspaper that NEITI in its latest report ‘Oil and Gas Industry Report 2021’ indicated that the NUPRC awarded marginal fields to some companies prior to payment of Signature Bonus by the firms, the Commission said: “It is worth restating that as a regulatory body governed by laws under the Petroleum Industry Act of 2021, the Commission neither awarded marginal fields to entities that did not participate in the 2020 marginal bid round nor awarded a field to any company that did not meet the obligation of paying the statutory signature bonus.”

“As the upstream oil and gas regulator, the NUPRC will remain transparent and predictable in its mandate to reposition the upstream sector of our economy to attract credible investors for the shared prosperity of the nation.

“We have always advised the media particularly and other organisations interested in our activities to cross-check information regarding our operations with us before going public, as some of what they get from outside may be technically and factually incorrect. The general public is therefore advised to disregard the publication by Sunday Punch as it lacks the requisite facts concerning the transaction in issue,” the Commission added.

Apparently surprised that NEITI could be associated with such a narrative, NUPRC reached across to the establishment which promptly disclaimed the newspaper report, insisting that the report by the newspaper does not reflect the position in the said NEITI report.

Absolving NUPRC of any blame the transparency agency said, “We in NEITI, therefore, clarify that our report in reference was quoted out of context. The 2020 marginal field bid exercise was commenced by the now-defunct Department of Petroleum Resources and not the NUPRC and its current management team.”

“From our records, the bid exercise for the marginal field was launched on June 1, 2020, while the NUPRC was set up in August 2021 and the management team of the commission was appointed about September/October same year,

“NEITI, therefore, would rely on its ongoing 2022/23 Oil and Gas Industry Reports to ascertain in details and with evidence how the exercise was fully conducted and finalised,” it added.

NEITI further stated that the next oil and gas industry report covering the period in question should be ready in 2024.

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