marginal fields

The aspiration of the Federal Government to grow the country’s oil reserves to 40 billion barrels has suffered a major setback as over 80 per cent of the oil blocks awarded between 2003 and 2007 have failed to commence production.

The Director, DPR, Mr. George Osahon, who addressed a gathering of marginal field operators in Lagos on Thursday, lamented the inability of 16 out of the 24 marginal fields to begin production 10 years after they were licensed by the government.

This, he said, had been aggravated by the fact that only one of the 77 oil blocks awarded between 2005 and 2007 was currently producing and it was being operated by a foreign firm.

The ones awarded to indigenous operators, he decried, had yet to commence production.

If the country must meet the industry target for reserves and production capacity, the DPR director said the oil blocks must go into production immediately.

Osahon, however, said the DPR was uncertain about the future of the country’s oil and gas industry with the divestment of assets by the International Oil Companies, which were now being taken over by the marginal field operators.

According to the DPR boss, the Niger Delta terrain is being taken up by indigenous firms and he questioned whether many of the indigenous firms would be able to embark on full scale production and whether they would do better than the IOCs.

The marginal oil fields are mostly those relinquished by the IOCs because of their low oil reserve capacity and taken over by some indigenous oil companies with the technical competence to produce an average of about 10,000 barrels per day or less.


Information from Punch was used in this report.