News Oil & Gas

FG to rake in $7billion from development of marginal fields

Barring any hitches, the Federal Government will rake in a minimum of $7 billion from the development of marginal fields going by the rebound in global oil prices.

In the reckoning of government, the country would produce, at least, 100 million barrels of crude from marginal field licences, a figure, when multiplied by over $70 per barrel, would bring the earnings of government to $7 billion or more.

Presently, the international price of crude oil is a little above $70 and, if the global crude oil continues, its recovery oiI price may get to $80 per barrel or more, a development, which is a good omen for Nigeria, which relies on earnings from crude exports to finance its budget, among carrying out other duties.

ALSO READ: Federal Government ready to end oil bid round for marginal fields

Speaking on the plans to close the bids for marginal field recently, the Group Managing Director, Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Mr Gbenga Komolafe, said that government would earn $7 billion as revenue from the crude oil produced by marginal fields.

He said that the 2020 marginal field bid round programme would be closed with machinery to progress the bid round exercise in line with the Petroleum Industry Act 2021 (PIA).

According to him, a notice has been issued to the companies that are participating in the bidding process to ensure that they are not left out, as the bids would end soon.

Komolafe said that the agency would address prevailing concerns of awardees, with a view to closing out issues affecting multiple awardees per asset and formation of special purpose vehicles (SPV) by awardees in line with the respective letters of award.

He called on awardees with the indicated issues to avail themselves of the resolution mechanism provided in the overriding national interest.

The CEO also stated that the agency was collaborating with lease holders to agree on transition mechanisms in line with the PIA and the aspirations of the government for the marginal field bid round exercise.

He stated that the 45 days period for payment of signature bonus by successful awardees as stipulated by the marginal field guidelines had elapsed, adding that the agency would ensure all applicable guidelines to enable beneficiaries who have paid signature bonuses to progress to the next stage of the exercise.

Recall that the Federal Government announced the bids for the marginal fields in June last year, in order to enable bidding follow due process and further ensure that the right people qualify for it.

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