Following the successful completion of the 2020 Marginal Field Bid Rounds in May 2021, 161 companies were provisionally awarded marginal fields subject to the payment of signature bonus. According to the Chief Executive Officer of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), only 119 of the shortlisted companies have fully paid the signature bonus with part payment made in respect of 9awards. The 45 days prescribed for the payment of signature bonus by the Marginal Field Bid Round (MFBR) guidelines have since elapsed and the NUPRC has now revoked the provisional award to 33 companies who have failed to pay the signature bonus.

In explaining the basis of the revocation, a public notice issued by the NUPRC stated that:

“in line with the rules and guidelines governing the 2020 marginal field bid round and the notification of potential award letters, all offers made to potential awardees who have failed to pay the signature bonus for their respective equity participation have expired by operation of law. And as such, interests have reverted to the bid basket due to effluxion of time for payment of the applicable signature bonus”.

Regarding the companies that made part payment of the signature bonus, their interest in the respective fields will be prorated and the portion not paid for will automatically revert to the bid basket. The revoked provisional awards will now be offered to reserve bidders in line with paragraph 9 (iii) of the MFBR guidelines. The reserve bidders will however be required to provide proof of funds as a basis for the issuance of potential award letters.

The 2020 MFBR provides an opportunity for indigenous companies to undertake upstream activities within the oil and gas value chain, develop capacity, and generate wealth from the sector.