The Nigerian Department of Petroleum Resources (DPR) recently released guidelines on the 2020 licensing round. Under the 2020 licencing round, a total of 57 fields located onshore, swamp, and shallow offshore terrains are on offer; while the ongoing Nigerian Marginal Fields Bidding Round is a purely domestic process, the development of these marginal acreages and discoveries will open up various avenues for partnerships with international capital and technology providers. Nigeria’s marginal fields licensing rounds have been the cornerstone of Nigeria’s upstream local content development strategy since the early 2000s and previous rounds gave birth to what are now strong local and regional African E&P companies. The move has been so successful that it is now being followed by other key African oil producing countries such as Angola and Gabon.
As one of the key objectives of the marginal fields licencing round is to promote indigenous participation in the Nigerian oil and gas sector and to foster technological transfer, the licensing round is exclusively intended for participation by indigenous companies i.e., companies duly registered to carry out petroleum exploration and production operations in Nigeria with 100% indigenous shareholding. However, upon the award of the marginal field, the awardee may assign up to 49% of its interest to another party subject to approval by the Minister of Petroleum Resources. Final approval for a marginal oil field award in Nigeria will be given by the president upon completion of all steps and all payable fees.
12 Steps To Obtaining A Marginal Oil Field License In Nigeria:
Announcement of the Marginal Field Bidding Round and launch of its dedicated portal;
Applicants fill and submit the online registration form along with the required documents after paying the registration fee;
Evaluation and prequalification of registered companies;
Notification of pre-qualified applicants;
Evaluation by the DRP of the submitted bids, which it forwards to the Honourable Minister of Petroleum Resources for approval;
Submission by the applicants of technical and commercial bids after paying the application and processing fees;
Granting of access to pry data and lease data to the applicants, who can purchase applicable reports after paying the necessary fees;
Pre-qualified applicants are granted access to Fields’ Teasers;
Notification of Preferred Bidder;
Payment of signature bonus by the Preferred Bidder (or the Reserve Bidder);
Award of the Marginal Field to the Preferred Bidder;
Negotiation and Execution of the Farm-out agreement between applicants and leaseholders.
S/N0 Description Amount
1 Registration fee N500,000
2 Application Fee N2,000,000 per field
3 Bid Processing Fee N3,000,000 per field
4 Data Prying Fee N15,000 per field
5 Data Leasing Fee N25,000 per field
6 Competent Persons Report N50,000 per field
7 Field Specific Report N25,000 per field
Source: Centurion Law Group Nigeria