By Fred Akanni, Editor in Chief
There are 29 shallow water fields among the 52 fields on offer in the ongoing Nigerian marginal field bid round, which wraps up on September 2, 2020.
This represents 56% of the total.
Compared with six offshore fields (or 25%) out of the 24 marginal fields offered in 2003/2004, this current round is enormously riskier.
Offshore fields are more expensive.
An average 20Million barrel field in 30 metres of water will require in excess of $65Million to reach first oil, according to modelling by Africa Oil+Gas Report.
In the last marginal field round, offshore fields represented the highest proportion of the fields that didn’t make it to first oil.
Out of the six offshore fields (all located, incidentally, in acreages operated by Chevron) awarded in 2004, only one made it to first oil.
The fields with the fastest routes to market, in the class of 2004, are located on land. Most of those that struggled to reach first oil, are in swamp terrain.
Details on funding challenges and opportunities in the July 2020 issue of Africa Oil+Gas Report.
Toyin,
You are a trouble maker. And so what if you secure a shallow water Offshore Field. With so much money accusing and available at NDDC, will it not make sense that all such fields are assigned to such an enigma of a corporation.
Were the funds in NDDC translated to developing all these shallow Ofshore Fields, the region will be Paradise on earth. Imagine the cash flow from all such cluster development flowing into just one region. They may not even the Federal monthly allocation from Abuja any more.
I challenge you to a wresting match if the maths are not good enough. It will be a Cluster development. They have enough cash and even abundant Human capital to take this as a regional developmental challenge.
Bear in Mind – I am a passionate Nigerian. I believe our development must come from within too!
Stay safe.
If your facts are correct, I think it behooves the government to use the various learning curves to do the right thing by putting in place some unique POLICIES to help support existing prospective shallow/Swamp field owners. There is nothing encouraging or attractive on the poor outing of the owners of these assets since 2004. If this government is really serious about increasing the country’s daily capacity, I think it should be more purposeful in the long term than the short term basis shrouded around this whole bidding process. Government should be an enabler and not impediment.
We need to be serious in this country if we want the overall revenue of the country’s Oil Proceeds to improve significantly.
Enjoy your day.
I would pay to watch this wrestling match. However, i would suggest we reduce it to an arm-wrestle.
I think the $65m is a modest estimate. However, we have to account for oil price and sinking $65m to produce barrels at $40 oil is already a loss venture. Government should be offering special tax incentives like Mozambique to encourage investment in the fields.
Based on the performances and race towards the attainment of first oil after the last bid round , no one would have thought that over 600 firms will apply this time, with the pandemic and low oil prices. It seems like DPR and perhaps other entities have better information about the fields this time around that we are not privy to. As most of the fields were part of the last bid process, and of course offshore fields still dominate. I hope it will not take the same path.