Nigeria’s petroleum regulator has provisionally awarded tenders to develop 57 of its marginal oilfields, four sources familiar with the matter told Reuters, which could net the government $500 million in signature bonuses.
Provisional award letters, sent last week by the Department of Petroleum Resources (DPR), requested payment within 45 days in order to secure the awards.
A DPR spokesman did not immediately return a call, email or text messages seeking comment.
Marginal fields are smaller oil blocks typically developed by indigenous companies. Nigeria is looking to production from the fields to bolster state finances and increase local participation in the oil sector, which provides the bulk of the country’s foreign exchange.
While local companies have become increasingly important to the industry, it remains dominated by international oil majors.
The 57 fields in the current auction, which was launched last June, are part of the first marginal field round in nearly 20 years.
DPR head Sarki Auwalu has said previously that he expects Nigeria to net $500 million from the signature bonuses, which companies can for the first time pay in either dollars or naira.
The sources said the bonuses each company will pay range from a few million dollars to more than $12 million.
As of last month, 161 bidders were still in the running for the fields. One of the letters seen by Reuters awards a share of one of the fields, and says the company will be expected to develop it with several unnamed companies.
Sources told Reuters that the DPR was awarding each field to more than one company, a process referred to as “arranged marriages” in the Nigerian oil and gas industry.
Participants have said the process lacks transparency, and that placing companies together on fields without their agreement could hinder field development.
Of the 24 fields awarded in the last round, in 2002, only 13 are producing. The government revoked the 11 non-producing licenses, though there are ongoing legal challenges.
(Reporting By Libby George; Editing by Kirsten Donovan)