Nigeria: NNPC Boss Calls for Indigenous Firms' Involvement in Marginal Fields

20 March 2001
allAfrica.com
By A Special Correspondent

Lagos — Indigenous oil firms should be allowed to participate actively in the development of marginal oil fields, Jackson Gaius-Obaseki, Group Managing Director of Nigerian National Petroleum Corporation, has said.

Obaseki said this at a workshop organised by the Society of Petroleum Engineers, in Abuja, in collaboration with the Senate Committee on Petroleum, according to a statement issued Tuesday by the NNPC.

Marginal fields are those considered by multinational oil fields as not holding much reserves, and thus are not worth developing. They also include fields whose locations make them unprofitable, due to high costs associated with such locations.

Rilwanu Lukman, Special Adviser to President Olusegun Obasanjo, announced last December that government had identified 116 of such fields, which he said hold a total of 1.3 billion barrels of crude oil. He said it was government's intention to give the indigenous firms an opportunity to grow through the development of the marginal fields.

Obaseki said allowing indigenous firms participate in the development of the marginal fields would "bring stability in the oil industry."

Multinational oil companies currently dominate the upstream sector of Nigeria's oil industry. Joint venture agreements between the government, represented by the NNPC, and seven oil companies, account for about 98 percent of Nigeria's crude oil production. Six out of these oil companies are multinational firms.

This predominance of multinational firms has led to calls by local entrepreneurs for measures by the government that can allow them participate in the upstream activities. Award of the marginal fields to them, is one of the means of getting them participate in the oil industry.

Obaseki called on the legislators to make appropriate laws for the development of marginal fields. The role of NNPC in marginal fields' development, he said, is enormous "in all aspects of negotiation and operation of fields for optimal benefits."

Lukman had announced in December that application for allocation of the marginal fields, to be conducted by the Department of Petroleum Resources, would begin in February. But a month after the target date, bidding for the award of the marginal fields is yet to be conducted.

Industry sources blame this on the need to reach agreement with the original owners of these fields, who have the first claim on them.

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