Oil & Energy
DPR Targets N189.5bn From Signature Bonuses Of 57 Marginal Oilfields
The Department of Petroleum Resources (DPR), says Nigeria will earn about $500 million (N1.89.5 billion) from the signature bonuses to be awarded for 57 marginal oilfields in the country.
The agency said the bid round processes for the oilfields which began in June 2020 would be concluded by the end of the first quarter of 2021.
Director, DPR, Mr Sarki Auwalu, made the disclosure while speaking last Friday during a television programme in Lagos.
A marginal field is any field that has reserves booked and reported annually to the DPR and has remained unproduced for a period of over 10 years.
Auwalu said the objective of the exercise was to deepen the participation of indigenous companies in the upstream segment of the industry and provide opportunities for technical and financial partnerships for investors.
The director said that out of the over 600 companies which applied for pre-qualification, 161 were successful and shortlisted to advance to the next and final stage of the bid round process.
“For the signature bonus, what we did internally was to look at the Competent Person Report and objectively estimate the average signature bonus on that field.
“Some fields are high while some fields are low. We estimate to have not less than $500 million which is very much on the conservative side,” he said.
Auwalu noted that the amount was aside the monies already generated by the agency through the applications and data leasing for the marginal oilfields applicants.
He said the DPR had also gotten approval for the signature bonuses to be paid in either Dollars or Naira to simplify the process for Nigerian companies and reduce strain on the nation’s foreign exchange reserve.
“Immediately after the payment of the signature bonuses and compliance with the farm out agreement and farm out demarcation area, we will issue the award and bring the companies together for them to arrange how to enter the fields.
“We hope to finish the entire programme before the end of Quarter 1 this year.
“Going forward, we will give about 90 days during which the Oil Mining License holders will have discussions because no two fields are the same so that we allow these assets to be developed.
“We believe it will increase the reserves of this country as well as provide a lot of stimulants to the economy,” Auwalu said.
He explained that the DPR had learnt from the mistakes made in previous marginal oilfield bid rounds, adding that the 2020 exercise would be devoid of such issues leading to lingering litigations and unproductivity.
Auwalu said the agency had put measures in place to ensure that the awardees would be credible investors with technical and financial capability.
He said the DPR ensured due diligence on all the applications with the assistance of the Nigerian Financial Intelligence Unit, the Department of State Security and the Federal Inland Revenue Service.
Explaining the rationale behind the non-publishing of the names of the 161 successful applicants selected for the final stage of the exercise, Auwalu said such an action was premature.
“All of them will not be successful. When we are finished, I can assure Nigerians that all the names of the successful companies that will be awarded will be known by Nigerians,” he added.
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Delta Targets 120MW Power Boost, Moves To Cut Reliance On National Grid
The State Commissioner for Works (Rural Roads) and Public Information, Charles Aniagwu, disclosed this at a press conference in Asaba, weekend, noting that the initiative was part of wider reforms aimed at opening up the power sector to private investors.
Aniagwu, who was accompanied by the Executive Assistant to the Governor on New Media, Felix Ofou, said the state was exploring alternative sources of electricity to support businesses, households and communities while reducing pressure on the national grid.
He said the government was particularly interested in exploiting Delta’s abundant natural gas resources for power generation, pointing to the Kwale Free Trade Zone, which is part of the state’s special economic zone, as a major opportunity for investors.
According to him, prospective investors were taken to the zone during the state’s recent economic summit to enable them to assess the availability of gas as a key raw material for electricity generation. ComparePower Rates
The commissioner explained that generating more electricity locally would not only increase supply in Delta but also free up power on the national grid for use by other consumers.
Aniagwu cited the 8.5MW Independent Power Plant located behind the state secretariat in Asaba as an example of what could be achieved through alternative power sources.
He said the facility had enabled the secretariat complex to operate independently of the national grid, thereby making the electricity that would otherwise have been consumed there available to other users.
He added that the planned 120MW partnership with Supply Power would further strengthen the state’s electricity supply capacity and provide a more reliable power base for small and medium-sized enterprises.
Aniagwu said the state government was also intervening in areas traditionally regarded as the responsibility of electricity distribution companies because inadequate power supply could no longer be allowed to constrain economic development. LearnQuantum Physics
He identified the extension of the electricity grid from Abraka towards the Ndokwa axis as one of the interventions being undertaken to connect more communities to electricity.
The commissioner, however, raised concerns over the burden placed on communities that are often required to provide transformers and other electricity infrastructure, only for distribution companies to take over the facilities and subsequently collect electricity bills without adequately accounting for the investments made by the communities.
He said the state would continue to support efforts aimed at energising communities, noting that improved electricity supply would stimulate businesses, create jobs and help tackle social problems associated with unemployment and idleness.
On regulation, Aniagwu said the government was working with the Ministry of Energy and a committee set up to develop an appropriate regulatory framework for the state’s emerging power sector. SwitchEnergy Plans
He said the proposed energy commission would be responsible for regulating new electricity producers, determining appropriate tariffs and overseeing distribution networks.
The commissioner stressed that liberalising the sector required effective regulation to protect consumers and investors, adding that decisions on power distribution infrastructure, including the use of overhead or underground lines, must take into account the peculiarities and safety requirements of each location.
He warned that power expansion without adequate regulation could expose residents to electrocution and other hazards, stressing the need to protect electricity infrastructure while ensuring consumers were not subjected to unfair pricing.
Aniagwu said the state government’s broader objective was to build an efficient and sustainable electricity market driven by private investment and capable of powering businesses, households and communities across Delta State.
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