Oil slump hitss marginal field operators

From:	COCE TV

Marginal field operators, whose fields have yet to start producing either oil or gas since they were awarded licences in 2003, are under increasing pressure from the plunge in OIL PRICES and may lose their licences next month, industry analysts have said.

The Department of Petroleum Resources, which regulates the oil and gas industry, had recently said it would revoke the licences of non-performing marginal fields in March this year.

It said it would review a number of criteria for non-performance of assets, including but not limited to proposing a field development plan and access to funding.

A marginal field is any oil and gas field in which available reserves do not make it commercially viable for the holders of Oil Mining Leases, typically the International Oil Companies to develop. Such fields are located within existing OMLs operated by the IOCs and are left dormant for a considerable amount of time.

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.

The DPR stated on its website that 30 marginal fields had so far been awarded, with 22 yet to reach production. The non-producing fields include Atala on OML 46 (Bayelsa Oil & Gas), Ofa on OML 30 (Independent Energy), Oza on OML 30 (Millennium Oil & Gas Company), Qua Ibo on OML 13 (Network E&P), Akepo on OML 90 (Sogenal Limited) and Oriri on OML 88 (Goland Petroleum).

The Team Lead, Oil and Gas Upstream, Diamond Bank Plc, Mr. Onome Atife, said in a telephone interview with our correspondent that when it was announced last year that marginal field licences would be revoked if the operators did not do minimum work on them, it was expected that there would be a lot of activities this year to ensure that those licences were not revoked.

"But unfortunately, with the current trend of lower OIL PRICES, there may not be a lot activities in that area. So, maybe the government will change its mind about revoking the licences, given the current situation," he said.