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By Uche Henry
The Human and Environmental Development Agenda (HEDA), has urged states and local council chairmen in oil producing communities to explore the huge financing options and other benefits in the Petroleum Industry Act (PIA).
HEDA in a 40- page document recently presented to the public and titled: ‘Spotlighting Oil And Gas’ is a diligent perusal of the least known aspect of the petroleum industry called ‘Marginal Fields Bid Licensing Round, BLR’, presented for public discourse, drew public attention to Chapter 2 of the Act, as its benefits to government and Nigerians are enormous.
According to the Chairman of HEDA, Mr. Olanrewaju Suraju, “BLR became an issue when government felt active indigenous participation in the oil and gas industry should be encouraged.
So far, Nigeria has had only two successful Marginal Field Bids Licensing Rounds. First, was in 2003/2004, and the second in 2020/2021.
“The focus of Marginal Field oil development anchors on the 1970s, indigenous policy of government aimed at promoting and protecting indigenous capital inflow against multifunctional dominance of Nigeria’s economy” he said.
Record has it that the 2020/2021 Marginal Field BLR fetched the federal government over Two hundred billion naira (N200 billion) along with other benefits.
Now that the petroleum Industry Act has come to give legal strength to marginal field participation, it is expected that more Nigerians, particularly state and local government actors show further interest in the sector.
Similarly, politically exposed persons across the federated units of the country should wake up and prevent portfolio investors from hijacking the good intentions of the government as entrenched in this Act.
By way of recommendation, Suraju HEDA maintained that there was need for full information disclosure at all stages of the bid licensing round (BLR) from the very beginning of expression of interest up to the issuance of certificate of award. “The absence of this during the 2020/2021 BLR informed real or imagined allegations about the happening of untoward practices across stakeholders, particularly civil society who felt undermined and not carried along the process.
“Cross-institutional checks for inter-agency collaboration with Nigeria Extractive Industries Transparency Initiative, NEITI, National Environmental Standards and Regulatory Enforcement Agency NESRA and National Oil Spill Detection and Response Agency, NOSDRA for key legal and operational provisions from oil spills, environmental protection and other governance processes such as beneficial ownership and contract transparency, are recommended to be held in strict collaboration with civil society. It is not just enough to claim transparency, it is also necessary for stakeholders, including the civil society, to see the process as undeniably followed”
The HEDA boss added that, any future Bid Round, especially the forthcoming 2022/2023 oil bloc exercise, should respect basic rights of investors and companies to decide who to form SPVS or not, rather than force mergers of persons/companies with diverse degree of competence, work culture and disagreeable profit sharing formula.
In strict business sense, he said companies should exercise the right to choose and decide how they form their , Special Personal Vehicles, SPVs in the event of merger on specific oil fields.
“The NUPRC and the Ministry of Petroleum Resources should continue in collaboration with other stakeholders in the oil and gas industry, including the civil society to realise the central goal and objectives of Oil Bid Licensing Round, while equally acting as a check on one another for the overriding interest of Nigeria’s economic growth and development.
This is necessary knowing that overall economic performance of the country is as important as what the oil bid round major blocks or marginal field is meant to promote” he stressed.
