Ahead of the bidding rounds for 47 expiring oil licenses in 2019, Partners for Petroleum and Energy Sector Prosperity Initiative, (P-PESPI) an advocacy group in the petroleum and Energy sector has called for more opportunity to be given to indigenous oil companies in the exploration and production arm of the oil and gas sector.
Charles Ibiang, Chairman of the group said allowing local companies like Seplat and Belema Oil take some of the marginal fields and onshore oil blocks due for renewal, is a strategy that will reduce conflict in host communities.
“We advocate that future allocation of oil leases, particularly in 2019, when most or about 47 oil block leases would have expired and subsequent renewal processes commence, our model should be put into consideration even as we call for an open and transparent bidding round.
"Indigenous upstream companies and marginal field operators that have shown serious capacity like Belema Oil, Seplat, etc should be given an opportunity for more assets in order to decrease their exposure to risk through huge production and economy of scale.
"Nigerians must begin to play a major role in both the onshore and deep offshore upstream sector of the Petroleum Industry,” the statement read.
According to the group, a strategy of reducing conflicts in oil-bearing host communities in the Niger Delta and preventing oil and gas infrastructure/ pipeline vandalism will be by allowing indigenous upstream oil companies take over or acquire oil assets from the divestment of marginal fields owned by multinationals and NNPC in various host communities.
Ibiang says these companies have good will, a comparative advantage over community relations and security issues in these areas. He feels they should, therefore, be given serious consideration as long as they possess the requisite experience, competence, technical and financial capabilities.
He, therefore, cautioned against Shell applying for a renewal of the Oil Mining Lease (OML1) 11 and 25 blocks. Ibiang believes the further operation of these blocks should be turned-over to Belema Oil, who has expressed interest in the fields.
“We believe it will reduce friction and increase production for the government. Our observation is that indigenous oil producers can take care of their host communities better than multinationals because they understand the realities and peculiarities on the ground in those communities.”
According to the statement, Oil Mining Lease 11 is in the southeastern Niger Delta. It contains 33 Oil &Gas fields of which eight are producing as at 2017. OML 25 is 50 kilometers south-west of Port Harcourt in the onshore eastern delta. It is part of a Shell/NNPC Joint Venture (JV).
The block is located on the coastal mangrove swamp and extends lightly offshore. Its intersected by the Santa Barbara and San Bartholomew Rivers.