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16 marginal field operators may lose licences

Marginal fields licensed in 2003 have until March 15 to start production or have their licences revoked, the Department of Petroleum Resources (DPR) has confirmed. The Head, Basinal Assessment and Lease Management of DPR, Mr J.A Babalola, while speaking in an exclusive chat with Daily Times in his office in Lagos, said that the department held a workshop with stakeholders on December 11, 2014 to learn and proffer solutions to the challenges being faced by the 16 affected marginal field holders who were awarded licences for over eight to ten years but have failed to produce.
Babalola stated that the department had written to the marginal field operators to justify why their licences should not be revoked after about 10 years without production.
He explained that the action of these marginal operators was contrary to the Federal Government’s programme to make ensure indigenous participation in the oil and gas sector in the country. According to him, DPR is reviewing the submissions of the marginal operators concerned, while awaiting the outcome of the Federal Government decision on the matter. Commenting on the eight other marginal fields that are in operation, he said that their licences were extended as long as they were in operation and producing.
He maintained that the deadline of March 15 given to the marginal field operators still stood as the position of the Federal Government had not changed with respect to the non-performing fields. Daily Times recalls that the DPR had in 2003 awarded 24 marginal fields to 31 indigenous companies as part of the Federal Government’s marginal field programme aimed at increasing reserves, production, employment, local content and indigenous participation in the upstream oil and gas business.
Only eight of the fields are currently producing, with the operators of the dormant fields continuing to grapple with financial and technical challenges, among other issues. However, with the current low oil price environment, analysts have said it is highly unlikely that many of the operators would beat the March 15 deadline, especially those that do not have access to foreign markets to raise money.

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