President Bola Tinubu has approved the conduct of fresh marginal field bid round to offer for sale more oil and gas fields abandoned by the international oil companies (IOCs) which have been lying fallow for over a decade.
The Minister of State for Petroleum (Oil), Senator Heineken Lokpobiri, revealed this during a facility tour of Waltersmith Petroman Oil Limited's modular refinery in Ibigwe, Ohaji-Egbema Local Government Area of Imo State, saying the bid exercise would commence "soon".
This emerged just as the Nigeria Extractive Industries Transparency Initiative (NEITI) and the Oil Producers Trade Section (OPTS) yesterday met with oil firms and miners at the NEITI-Companies Forum, where they brainstormed on strengthening companies' participation towards enhancing transparency and accountability in the nation's oil and gas and solid minerals sectors.
The new bid round is coming barely three years after about 57 marginal oilfields were put up for sale in 2020 and the process effectively concluded last year, amid many of the awardees still struggling to move to site for development of their assets due largely to funding and regulatory challenges.
The minister was quoted in a statement issued yesterday, by the Nigerian Content Development and Monitoring Board (NCDMB), disclosed that he had obtained presidential approval to conduct a fresh round of bidding, which would take place soon.
He promised that, "marginal fields would (henceforth) be prioritised in terms of their location to those who have modular refineries, so that they will be able to produce."
The marginal field exercise is exclusively reserved for Nigerian companies as the federal government through the policy offers opportunity to local firms to participate more actively in the country's oil and gas exploration and production space.
It is essentially to help increase Nigeria's oil and gas production and reserves, boost federation's revenue, create jobs for the teeming population and contribute to the development of the host communities.
Lokpobiri, however, commended Waltersmith Group and the Nigerian Content Development and Monitoring Board (NCDMB) for supporting the federal government agenda of improving domestic refining capacity.
The Minister expressed satisfaction towards the company and NCDMB for taking the bull by the horn to commence local refining of crude and partially meeting the demand of the local.
According to him, "The quickest way to fix our energy challenge in the country should be through modular refineries, while we await the total rehabilitation of the big refineries."
He said the 5,000-barrel per stream day Waltersmith Petroman, which has been a stable source of diesel, kerosene, naphta, and high fuel oil to the domestic market since its inauguration in 2020, was for him a proof of how beneficial such smaller processing plants could be.
Lokpobiri, expressed commendation to the NCDMB Board for taking up equity in Waltersmith Refinery which quickly facilitated the completion of the modular refinery.
While commending Waltersmith Group, the minister charged companies who had been given licences for modular refineries and marginal field licences to take cues from Waltersmith and make deliberate investments.
He stated, "If you have a marginal field, an allocation, it is a paper given to you, it doesn't add value to you or to Nigeria, unless you take it to the next level by making the requisite investment and then adding the value that is expected."
"What I am saying is that out of the numerous marginal fields that were allocated, only Waltersmith and a few of them have been successfully driven," he stated, recalling that he had sounded a warning at the recent Nigeria Economic Summit Group (NESG) event in Abuja, that marginal field allocations without the requisite investments stood the risk of being cancelled.
Explaining the imperative of such a line of action, he said, "It is important that we make this point so that we can retrieve some of those fields to the basket," so as to reallocate such assets to those able and prepared to develop and exploit them to the benefit of the industry and the nation.
Commending the remarkable success story of Waltersmith, whose management has announced plans for further expansion, Lokpobiri said, "I can assure you that this Government will do whatever we can to support you so that you can continue to grow."
He further praised the NCDMB whose direct involvement through equity participation, greatly facilitated the take-off and operations of the refinery.
In his remarks, the Executive Secretary of NCDMB, Mr. Simbi Wabote, said the decision of the Board to participate as equity holder in Waltersmith was informed by its sense of mission and the impressive organisational arrangement within the company.
According to him, the NCDMB had no hesitation to partner with Waltersmith, "given the very clear corporate governance that is required and exists within the company," adding that "part of our mandate is to enhance development and we see ourselves as catalysts for the industrialisation of Nigeria.
"At NCDMB, we are proud of what we have achieved here at Waltersmith."
Also, the Managing Director, Bank of Industry Limited, Nigeria, BoI, Dr. Olasupo Olusi, pledged to partner modular refineries as a viable means of solving economic challenges in the country.
He reiterated the commitment of the development financial institution to continually support effort that would add value to the Nigeria economy.
Olusi, who was in the company of Heineken Lokpobiri and Wabote during the facility visit to Waltersmith Refinary, in Imo State, dislosed that the BoI had established partnership with NCDMB and Waltersmith aimed at promoting the production local contents and managing inflation and other economic issues in the country.
According to him, "one of the strategic vision for the localisation of production is to take control of our own energy sources and there is nothing else important right now for Nigeria to do more than that.
"So it is for this reason that we are already in partnership with NCDMB and Waltersmith. We have talks that are in very advanced stage of financing agreement to support the growth and development of modular refineries in general and Waltersmith in particular.
"We are very open and committed to supporting modular refineries. Because if we are able to support modular refineries more, we will be able to manage inflation better and of course, the physical pressure in terms of all the noise around the minimum wage may reduce.
"And so for us, our engagement is strategic in this very critical sector of the economy." the BoI CEO added.
In an interview at the conclusion of the tour, the President and Group Chief Executive Officer of Waltersmith Petroman Oil Limited, Mr. Abdulrasaq Isa, said part of the expansion plans of the company was to raise the capacity of the processing plant from the present 5,000 to 40,000 barrels per stream day, and to be able to produce two million tonnes of petroleum products per annum.
According to the company, the refinery has so far supplied a total of 600 million litres of petroleum products into the Nigerian market since its commissioning in 2020.
NEITI, Oil Producers Step up Measures to Strengthen Transparency, Accountability in Petroleum, Mining Sectors
The NEITI and the OPTS yesterday met with oil firms and miners at the NEITI-Companies Forum, where they brainstormed on strengthening companies' participation towards enhancing transparency and accountability in the nation's oil and gas and solid minerals sectors.
Convened in Lagos by the OPTS, the forum, which was attended by the NEITI team led by its Executive Secretary and Chief Executive Officer, Dr. Orji Ogbonnaya, had representatives from Oando Plc, Platform Petroleum, ND Western and the National President of Miners Association of Nigeria, Mr. Dele Ayanleke, amongst others.
Speaking at the event, Ogbonnaya explained that the NEITI-Companies Forum was a veritable platform through which the agency helps the country and the operating companies to comply with the global Extractive Industries Transparency Initiative (EITI).
He stressed that participation at the highest level of EITI process was compulsory, assuring that NEITI would work with OPTS to deepen and strengthen the Companies Forum, which he said witnessed a drawback due to the Covid-19 pandemic.
"We have not met as often as we should. But we have already discussed with the OPTS, and now that Miners Association of Nigeria has come on board, we are going to come up with strategies and hopefully reconvene this forum by March 2024", he stated.
He explained that the forum was put together to create opportunity for companies to scrutinise the work of NEITI, ask questions where necessary and seek clarifications without having to write letters, and understand their jobs as members of the forum.
He said companies' participation in EITI's activities had implications on the corporate reputation of the companies globally, adding that NEITI was that review mechanism on how to adhere to transparency, accountability and good governance.
Rather than take actions or make comments that would damage companies' reputation, Ogbonnaya said NEITI was mainly set up to encourage and create an enabling environment for companies to do their businesses.
The NEITI Executive Secretary further said, "We are a member of 57 member countries. Whatever happens here is tracked by 57 member countries around the world including the G7, G8 countries.
"We also want to engage in series of trainings with the OPTS to be able to expose them to whom truly we are, and then understand from them what we are not doing right, what we could do better and then seek their views on how to improve. But the forum has to be strengthened and put in place for that to happen.
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"One area that we are going to ask the companies and that we will push it at the highest level is for higher level of representation, sending to us at this forum people who can take message and be in a position to participate in decision making. That's what the forum is all about and we are going to communicate that very directly."
Earlier in his opening remarks, the Executive Director of OPTS, Mr. Gwueke Ajaifia, said his organisation had been discussing with NEITI on how to strengthen the Companies Forum, engage with the key stakeholders in all the companies and ensure that the next forum records larger attendance.
He said NEITI was important to every stakeholder in Nigeria owing to the data and information it releases which helps Nigerians to understand what happens with the nation's extractive resources.
According to Ajaifia, "In our society, where people just do things without planning, NEITI is a very good development to help us change our mindset."
However, to strengthen the NEITI-Companies Forum, he stressed the need to reach out to industry members in order to reestablish their commitment and make sure they all attend the next forum.
Ajaifia stated, "Now, for us in OPTS, we are very interested in NEITI. We are on the board of NEITI, but beyond that, it is in our interest to be able to show people what we are doing, because transparency is not just for anything but to help to prevent corruption and mismanagement."
He said the oil and gas industry was important to Nigeria owing to the huge amount of money they generate for the country.
"And if people do not know what is happening to this money, they will probably think we are siphoning the money away, which is not the correct thing; rather, we are actually creating wealth for the country, but this wealth, people must see how it comes in, how it is used and decide whether it is judiciously applied.
"So, OPTS is ready to make the required financial contribution to bring the industry together to achieve the desired goal", he added.
In her remarks, the Director of Communications at NEITI, Mrs. Obiageli Onuorah, pointed out that one of the reasons for countries to embrace the EITI was because it builds confidence between the host communities, the operators and the government that manages and governs the revenues from the sector on behalf of the citizens.
