The Department of Petroleum Resources (DPR) has picked winners for 57 marginal oil blocs with demand for them to pay as much as $1.14 bil lion cumulative Signature Bonus in 45 days.
The agenxy itself said rarlier that it targetted at least $500 million in signatire bonuses from the process.
The agency, Platforms Africa gathered, distributed the third letter in the series of correspondences it has been sending to, apparently, the 161 companies selected as winners of interests in the 57 marginal fields on offer in the country’s second bid round, described by some observers as the country’s least transparent bid round in 20 years.
The third letter, emailed on March 2, 2021 to the winners, sighted by Platforms Africa, specified the percentage awarded to the recipient and the signature bonus expected of it by government.
The DPR, which e-mailed the letters separately to the winners, has not published their names, even as checks by this online newspaper, however, showed that the winners include seven marginal field operating companies
The list also has four companies run by members of Petroleum Technician Association (PETAN), the umbrella grouping of oilfield engineering contractors. Other companies that have reportedly received letters include those promoted by retired technical staff of some of the international oil companies (IOCs) operating in Nigeria.
The DPR, according to the letter, expects the signature bonus to be paid in 45 days, and it could be paid in either the local currency naira or in US dollars. The total signature bonus per field ranges from $5 million to $20 million and this shows that the winners are to pay as much as $1.14 billion as bonuses.
However, since no single field is assigned to a single company, the signature bonus demanded from each company correlates with the percentage interest in the field offered to the company. If the entire signature bonus charged to Field A is $5 million, a company assigned 20 per cent equity in that field is asked to pay a signature bonus of $1 million.
A source at the DPR confirmed to New Telegraph that the agency was the source of the letter. Names of those who have been granted the awards remain largely in the realm of speculation, as the authorities have not published the list.
This latest correspondence to awardees, it was observed, still doesn’t specify who the partners are and doesn’t tell who operates the field, but the partners on each field are expected to jointly create a Special Purpose Vehicle to operate the asset.
“The lack of knowledge of who partners are raises the risk involved in the funding of the signature bonus.
“So does the instruction to awardees attached to every field to create a Special Purpose Vehicle (SPV) to act as operator,” a report on the bid round read. The first of the three letters emailed to “winners,” sighted by this newspaper, indicated that the addressee was qualified for a certain field.
The second letter then merely asked the awardee to specify which currency they want to pay the signa ture bonus in. The third letter, which specifies the percentage that the awardee has on the field and requests for payment of signature bonus in 45 days, is the first firm commitment the authorities are making to awardees.
“But questions around who other partners are and who to operate the field indicate that there will either be a fourth letter or the DPR will publish a list on which the fields, the awardees to each field, the signature bonus and the operator will be. It’s quite exhausting,” one of the awardees said after his anonymity was guaranteed. He refused to give further details as “this is likely to give hints about my business and jeopardise our chance.”