Nigeria extends deadline for interest to bid for oil fields

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The Department of Petroleum Resources (DPR) announced earlier today that it had extended, by one week, the deadline for the registration of interest to bid for the marginal oilfields in Nigeria.

It would be recalled that the deadline was earlier scheduled to end by to be June 14, however, the DPR has now extended it to June 21, with no reasons given for the extension.

The exercise, which is the first to be conducted in nearly twenty years, would be carried out electronically. The process entails expression of interest, pre-qualification, technical and commercial bid submission, and bid evaluation.

The marginal oilfields comprised of 57 fields located on land, swamp and shallow offshore terrains. The bids will enable the government to raise some much needed revenue to supplement its revenue shortfalls.

National Daily gathered that while there’s a need for these asset sales, there is also the concern that a bidding process under the current economic environment will be fraught with difficulties. First, there is the issue of fluctuations in oil prices which could lead to intending investors basing their valuations on pricing models that could become unrealistic in the near future.

There is also the fact that many local companies have been hard hit by the effects of COVID-19 and the ensuing significant decline in oil prices. The implication of this is that these local oil companies may not have sufficient cash flows nor be able to raise needed funds from both local and international banks.