NAPENews Magazine August 2021 Edition

It's the dawn of another era in the Nigeria Oil and gas industry as another batch of new marginal field operators/Investors get
awarded a marginal field acreage. DPR had mentioned that 57 marginal fields were awarded to 80 indigenous companies and as
such expect that Barrel of oil production per day will increase as the operators ramp up to get their first oil.
Despite calls about the ambiguity of the process and the forced marriages of companies for the fields, DPR needs to be commended
for having taken the bull by the horn in executing this long-awaited process, as there hasn't been any such fully executed process in
the past 20 years.
Marginal fields refer to discoveries which have not been exploited for long, due to one or more of the following factors: Very small
sizes of reserves/pool to the extent of not being economically viable, lack of infrastructure in the vicinity, poor production profile,
capital operating and expenditure requirements and brevity of profitable consumers.
There are notable companies who have succeeded in fully executing and turning around the fortune of marginal fields to become a
veritable Exploration and Producing (E&P) companies in Nigeria. The story of NDPR and Energia would remain a reference point for
new marginal field operators.
These companies having started with marginal field operations have now translated to become Nigeria's foremost Vertically
Integrated Energy Companies. As the New marginal field owners go home to commence work, it's imperative that the critical path to
first-oil will take preeminence. However, I'd like to mention that sequel to the New marginal fields bid-round, over 11 marginal fields
asset were revoked by DPR, which claims non-performance of their field development program. Some of the first marginal field
round winners were still battling with issues around governance structure and financing even after 15 years of bid award. It's
peremptory that these new marginal field operators learn from the purported failures and seek to better their lots.
One critical area to getting to first oil, especially with the issue of forced marriages of companies is to ensure a well-defined corporate
governance structure of the New-Co (New Company) to be created by these unions. A governance structure that effectively
maximizes the strength of parties within and in respect of the New-Co and takes cognizance of the improvement opportunities
required to effectively starting-up and building a world class E&P Company. The idea of a New-Co rather than a JV or IJV structure
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