600 Firms Express Interest in Nigeria’s Marginal Oil Fields

On Wednesday, the Nigerian government announced that six hundred companies have applied for prequalification for the ongoing bid rounds of 57 marginal oilfields.

According to Sarki Auwalu, Director of Nigeria’s Department of Petroleum Resources, the country’s transparent and credible licensing process is a key factor in the widespread attractiveness for this particular round.

“We have witnessed an increase in bidders after the extension of the deadline to June 21. There has been an almost 30% increase in participation,” said Auwalu Sarki. “If you are making a bid or auctioning any oil field, you need to get 10 companies per field going after the field. We have 57 fields and over 600 companies, so we can say that we are celebrating success so far. After the extension, we are moving according to schedule and now we are in the phase where we do pre-qualification for the bidders to apply. Everything is going perfectly.”

Local companies, however, have struggled to participate in the prequalification process due to constraints linked to the COVID-19 pandemic and low prices, which have forced oil companies to drastically reduce spending.

That said, Seplat Petroleum Development Company Plc, one of Nigeria’s leading independent oil and gas companies, said that current conditions have not changed its long-term strategy for acquisition opportunities.

“We did a successful acquisition of Eland Oil & Gas at the end of last year, and despite the collapse of the oil price globally and hardship in the global economy, we remain focused on acquisitions,” said Dr. Bryant Orjiako, Chairman of Seplat. “When we see an acquisition, we said we are committed to price-sensitive acquisition, which means that we will not overpay. As the industry changes, it means that the prices that buyers are willing to pay will continue to change and that we will change with this and continue to do acquisitions.”

Nigeria’s marginal field round was launched on June 1 2020, with the last marginal field bid exercise conducted in 2003.