CBN urges the National Assembly to fast-track the passage of the PIB

It has been reported that the Central Bank of Nigeria (“CBN”), through its spokesperson, Ugochukwu Okoroafor, has called on the National Assembly to fast-track the passage of the Petroleum Industry Bill.

The CBN’s appeal comes in light of recent allegations that the Nigerian National Petroleum Corporation failed to remit close to US$50 billion dollars in crude oil export revenue. The CBN anticipates that the Bill will put a stop to revenue leakages by reviewing the fiscal terms in sharing of oil revenues between Nigeria and its foreign oil partners, as well as improving governance and transparency in the oil sector.

Update on the 2013 Marginal Field Award Exercise

The DPR’s Nationwide Road Show for the 2013 Marginal Field Award Exercise drew to a close at the NICON Luxury Hotel, Abuja. The Road Show which was staged in four cities around the country revealed some interesting insights which are highlighted below:

  • The deadline for pre-qualification applications may be in mid-January;
  • Applications are to be made online – payments may also be made online if accepted by the Treasury. Discussions are ongoing for confirmation of mode of payment;
  • Application forms may be available as early as next week;
  • Prequalification structuring considerations – bidders will need to pay very close attention to the bidding vehicles to be utilized for the process. In particular, close attention needs to be paid to ensuring that Nigerian beneficial interest is not less than 51%. DPR will also give consideration to the number of individual promoters (minimum of 4) and in the case of consortia made up of companies, the shareholders in the individual promoter companies may not be less than 4;
  • Each bidding vehicle must have a promoter with upstream exploration and production experience;
  • Promoters may participate in not more than 2 companies;
  • Technical partners may enter into a relationship with not more than 4 companies;
  • All bidding vehicles must lease data; and
  • Post-qualification financial considerations- in selecting the final winners DPR will be concerned to examine whether a bidding vehicle has shown a “line of sight” to finance. Bank support letters on their own will be insufficient. Bidding vehicles must show access to 20% of the expected cost of development for the marginal field estimated by DPR to be between US$ 80 million – US$ 100 million.

We shall keep you apprised on further developments in this regard.

2013 Marginal Field Licensing Rounds

The Federal Ministry of Petroleum, via the Department of Petroleum Resources (DPR), recently announced the commencement of the second Marginal Field licensing round. To this end, the DPR has recently issued guidelines outlining the steps interested participants are to follow from pre-qualification to selection. Please see our guide to the process – Marginal Fields 2013 – A brief guide.

The exercise which is aimed at encouraging participation of indigenous exploration and production companies in the Nigerian upstream sector kicks off with  a series of Town hall sessions billed to take place on the following dates and at the following venues:

Lagos: December 3, 2013, 10 a.m. at Eko Hotel and suites, Victoria Island, Lagos;

Port Harcourt: December 5, 2013, 10 a.m. at Hotel Presidential, Port Harcourt;

Kaduna: December 10, 2013 10 a.m. at Crystal Garden Hotel; and

Abuja: December 12, 2013 10 a.m. at Nicon Luxury Hotel, Abuja.

We shall keep you updated on further developments.