The 161 companies selected as winners of interests in the 57 marginal fields on offer in the country’s second marginal field bid round have been issued the third letter in the series of correspondences the Department of Petroleum Resources (DPR) has apparently been sending to them.
The third letter specifies the percentage awarded to the recipient and the signature bonus expected of it by the government. The letters were emailed on March 2, 2021, and the authorities expect the signature bonus to be paid in 45 days, and it could be paid in either the local currency Naira or in US Dollars.
The total signature bonus per field ranges from $5Million to $20Million, but since no single field is assigned to a single company, the signature bonus demanded from each company correlates with the percentage interest in the field offered to the company. If the entire signature bonus charged to Field A is $5Million, a company assigned 20% equity in that field is asked to pay a signature bonus of $1Million.
Names of those who have been granted the awards remain largely in the realm of speculation, as the authorities have not published the list. This latest correspondence to awardees still doesn’t specify who your partners are and doesn’t tell who operates the field, but the partners on each field are expected to jointly create a Special Purpose Vehicle to operate the asset.
The lack of knowledge of who your partners are raises the risk involved in the funding of the signature bonus. So does the instruction to awardees attached to every field to create a Special Purpose Vehicle (SPV) to act as operator.
According to Africa Oil+Gas Report, winners of this round include at least three marginal field operating companies. There are also at least three companies, run by members of PETAN, the umbrella grouping of oilfield engineering contractors. Other companies that have reportedly received letters include those promoted by the retired technical staff of some of the oil majors operating in Nigeria.
But there is a lot of talk about wheeling and dealing in Abuja and names of companies that have been awarded fields that didn’t even apply. The only way to dissuade anyone from believing false conspiracy theories is to know who got what at every stage of the process.