'NUPRC awards marginal fields to companies without signature bonus'
Dublin, Ireland -- The Nigeria Extractive Industries Transparency Initiative, NEITI, has accused the Nigeria Upstream Petroleum Regulatory Commission, NUPRC, of failing to adhere to its own regulation, stating that out of the 106 companies awarded 57 marginal oil fields in 2021, only five paid the signature bonus before the award.
NEITI, in its recently released 2021 Oil and Gas Audit Report, noted that this was in contravention of the NUPRC’s regulations, which stipulates that all successful applicants must pay the signature bonus for the fields prior to award.
It further reported that four other companies whose names were not listed among the awardees, paid signature bonuses for the 2020/2021 award, raising questions around transparency.
NEITI said: “A total of 106 companies emerged from the process as the Marginal Field Bid Round awardees. It should however be noted that only five companies had made payment of signature bonus based on 2021 audit information provided by NUPRC.
“According to the Commission’s regulation, all successful applicants whose names are in the Notice of Preferred Bidder Status ought to have made payment of signature bonus, prior to award. It should be noted that four other companies whose names were not on the list of awardees paid signature bonus on 2020/2021 marginal fields award.
“Award of marginal fields prior to payment of signature bonus as well as payment of signature bonus by companies that did not participate in the process by NUPRC indicates that the Commission did not adhere to its own regulations.”
NEITI disclosed that marginal fields accounted for 1.18 per cent
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of Nigeria’s total crude oil output in 2021, compared with 3.2 per cent in 2021.
Specifically, it noted that 6.67 million barrels of crude oil was produced from marginal oil fields in 2021, dropping by 19 per cent compared with 20.648 million barrels produced in 2020.
In general, it stated that Nigeria’s total crude oil output dropped by 12 per cent to 566.13 million barrels in 2021, compared with 646.787 million barrels in 2020.
NEITI further reported that crude oil production was driven by companies under Production Sharing Contracts, with 242.957 million barrels in 2021, dropping by four per cent, compared with 253.782 million barrels recorded in 2020.
It was followed by Joint Venture arrangements, according to NEITI, which recorded 225.23 million barrels of crude oil in 2021, dropping by 17 per cent compared with 271.418 million barrels in 2020; while sole risks companies produced 80.294 million barrels in 2021, declining by 19 per cent compared with 99.839 million barrels recorded in 2020.
Specifically, PSC accounted for 42.92 per cent of Nigeria’s total crude oil output in 2021; while JV and sole risks accounted for 39.78 per cent and 14.18 per cent, respectively.
Kyari