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The Masterstroke of Olumide Akpata’s Election Reforms Committee – By Raymond Nkannebe

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If there were any doubts about Mr. Olumide Akpata’s campaign promise of hitting the ground running from the first day of his administration, they were cleared last Friday, 28th August, 2020 as he took to the rostrum to deliver his inaugural address as the 30th President of the Nigerian Bar Association.

By all accounts, it was not the typical kind of address. It was in many respects, a statement of action. Nothing vindicates this more than his announcement of the Election Audit and Reforms Committee to audit the last three elections conducted in the current regime of electronic voting, and to advise recommendations on how the Nigerian Bar Association can elevate the quality of her elections to the extent humanly possible to avoid the glitches that characterised the recent elections of the Association. Of course, including the election that brought him to power.

“One major complaint about the last election was the issue of the database of lawyers and resultant difficulties in coming up with a credible voters’ register. To address this, my administration will improve upon the membership portal introduced by the President Paul Usoro administration. Additionally, I am immediately constituting an Electoral Audit and Reforms Committee, comprising distinguished practitioners of the highest standards to audit our 2016, 2018 and 2020 elections and recommend reforms for our electoral systems and processes” the address read.

After the ugly outcome of the referenced elections manifesting in the polarization of senior members of the Association and incidentally, the unity of the Bar, the timely constitution of the Election Audit and Reform Committee is a bold step towards an improved election management template befitting an organization like the NBA, as a model for other professional Associations. But that is not all. The frame of mind that informs the decision merits our collective credit. If anything, it proves that the new leadership of the NBA under Akpata, is not interested in unnecessary sanctimony or self adulation, but institutional reforms of the organization so that it can deliver more value for its teeming membership.

It reminds one of a similar decision taken by former President Umaru Musa Yar’Adua (of blessed memory) whom after he took over the ship of the Nigerian State, acknowledged the deficiencies in the elections that brought him to power, and pledged a commitment to electoral reforms as one of the planks of his famous Transformational Agenda. A strategic move that would give birth to the famous Justice Muhammed Uwais Report that remains a model for election management in Nigeria.

With eminent members drawn from different branches of the NBA as well as interest groups within the Association such as Ayo Ayotunde, SAN reputed for overseeing the highly acclaimed elections that brought in the current excos of the Lagos Branch of the NBA led by Yemi Akangbe; Ama Etuwewe, SAN; Andrew Odum, a renowned supporter of Deacon Adesina, SAN during the last elections and Ibrahim Altine, a popular supporter of Dr. Babatunde Ajibade, SAN and the Chairperson of the  Federation of  International Women Lawyers (FIDA) to name a few, it is safe to say that the Committee is a bi-partisan and inclusive one whose work would not be influenced from any quarters contrary to the insinuations of some commentators.

Perhaps, more than anything else, the commitment of Akpata to implement “whatever recommendations they come up with well ahead of time to ensure that the 2022 election is devoid of those glitches that we noticed in the 2020 election” is reassuring to the extent that it demonstrates thorough understanding of the problem with a clear vision and roadmap of enacting the needed change which has eluded the NBA for too long. 

If democracy has taught us anything, it is that the quality of the electoral process to a great extent informs the legitimacy of any government that proceeds from it. Examples abound of how nations snowballed into theaters of conflict arising from controversial elections.  Thus, while periodic elections matter, how they are conducted matter most. 

For the NBA as a foremost professional organization, sadly, the story of her elections both at the branch and national levels, over the years leave much to be desired. However, it is within this context that the masterstroke of Akpata’s Election Audit and Reforms Committee resonates. God forbid that in 2022 the NBA would be seen reinveting the wheel in the conduct of her elections. And in the context of Akpata’s campaign mantra, perhaps it should be said that the Bar cannot work for All, if her leadership is not reflective of the sentiments of her membership.

Raymond Nkannebe, a legal practitioner writes from Lagos.

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Naira strengthens against dollar ahead of CBN FX sales to BDCs – Parallel Market Rate

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Aug 29, 2020: $1 to N471

Aug 30, 2020: $1 to N465

Aug 31, 2020: $1 to N450

Sept 1, 2020: $1 to N430

Sept 2, 2020: $1 to N420

The Naira has gained N51 in 5 days.

The naira has strengthened at the parallel market to N420 against the dollar after the Central Bank of Nigeria (CBN) announced that it would resume dollar sales to bureau de change operators.

Before the announcement, the naira had been trading as low as N480 against the dollar.

Upon resumption, the apex bank said BDCs must not exchange the naira at more than N386/$ to end-users.

The CBN said its decision to resume FX sales to BDCs is to enhance accessibility to forex “particularly to travellers” since the resumption date for international flights has been announced.

The CBN also said deposit money banks shall continue to sell forex for travel-related invisible transactions to customers and non-customers over the counter upon presentation of relevant travel documents, passport, air ticket and visa.

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Ex-Nigerian Minister, Nweke Emerges President of Harvard Kennedy School Alumni Association

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Nigeria former minister of Information, Frank Nweke Jnr, has emerged President of Harvard Kennedy School Alumni Association of Nigeria.

Nweke served as Minister of Inter-governmental Affairs, Special Duties and Youth Development, and later Information and Communications under former president Olusegun Obasanjo administration.
Nweke was elected alongside Aminu Mukhtar Dan’amu (Vice President).

Dan’amu is a former Kano State commissioner for Finance and Economic Development and served as Economic Adviser to two governors in Kano State.

In his acceptance speech, Nweke said, “As beneficiaries of a Harvard education and it’s accompanying networks and pedigree, the burden of responsibility is upon us to do all that we can to lead in navigating this new world by contributing our knowledge, skills, experience, network and resources, towards transforming our country, society, and communities for the better.”

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NCAA Approves Lagos, Abuja Airports To Resume International Flights On September 5

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The Nigerian Civil Aviation Authority (NCAA), has confirmed the Nnamdi Azikiwe International Airport, Abuja, and Murtala Mohammed International Airport, Lagos as the two airports allowed to resume international flight operations as from September 5, 2020.


NCAA disclosed this in a statement with reference NCAA/DG/AIR/11/16/255 to all aviation stakeholders and foreign airlines operating in Nigeria.
The letter signed by NCAA Director General, Captain Musa Nuhu, disclosed that other airports would be gradually reopened, stressing, however, that the two would have to adhere to existing COVID-19 protocols for approvals.


The statement reads, “Other international airports namely Mallam Aminu International Airport, Kano (DNKN), Port Harcourt International, Omagwa, (DNPO), Akanu Ibiam International Airport, Enugu, DNEN, will remain closed to international flights until a new date is determined and announced.”


Nigeria had on March 23, 2020, shut it’s airspace to international travel to contain the spread of the coronavirus.

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School Reopening: NANS Urges Federal Govt, ASUU To Negotiate

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With the reopening of schools in some states in the country, the National Association of Nigerian Students (NANS) has come out to support the Academic Staff Union of Universities (ASUU) in it’s negotiation with federal government regarding the ongoing strike.


NANS President Danielson Akpan came out to reveal the Union’s stand while speaking with newsmen.


According to Akpan, ASUU embarked on an indefinite strike because of the Integrated Payroll and Personnel Information System (IPPIS) issue, and failure of the government to fulfill other agreements reached with ASUU.


University students have been at home for over 5months due to the industrial action by the academic staff and the decision of the National University Commission (NUC) to shut down all schools over the coronavirus pandemic.

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Oba Of Benin Chides Obaseki, Ize-Iyamu Over Electoral Violence

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Oba of Benin, Omo N’Oba N’Edo Uku Akpolokpolo, Oba Ewuare II, yesterday rebuked politicians in the state, particularly the governorship candidates of the People’s Democratic Party (PDP), Governor Godwin Obaseki and the All Progressive Congress (APC), Pastor Osagie Ize-Iyamu, for the pre-election violence and belligerent electioneering utterances, threatening to tear the state apart ahead of the September 19 election.


However, the state Commissioner of Police, Mr Johnson Kokumo, has assured the monarch and the people of adequate security, saying there’s no cause for alarm.


“The utterances, statements and activities that I hear are most immature”, the revered monarch told the two leading candidates and their promoters, including former governors John Odigie-Oyegun and Adams Oshiomhole, in subdued anger during a peace meeting in his palace in Benin.


The Benin monarch at the meeting initiated by him said there were talks about the candidates of the two major parties arming thugs. He warned them to desist from the act and expressed worry about what the guns would be used for after the elections.


Oba Ewuare II, who said that he was worried about the violence across the state over the September 19 poll, stated that politicians must learn to conduct themselves in a peaceful manner, noting that election was not a do-or-die affair.


He admonished the politicians and parties to note that they have only Edo State to call their own and must do everything possible to protect it from disintegration.


He said not only has the state been in the news for wrong reasons, but that the governorship election has divided the people.
The first-class monarch said, “I have noted that Benin politics has been in the news for quite some time for all the wrong reasons. I have been having sleepless nights for some days. We are all from Edo State. We are no strangers.


“Why do you want lives to be lost by arming thugs, who will later hide the guns? Enough is enough. Let the September 19 governorship election in Edo State be peaceful.


“Be mature and be proud of Edo State. Do not make Edo State a laughing stock.”
He added, “Don’t kill yourselves over an office, don’t kill yourselves over votes, let us have a working relationship that President Muhammadu Buhari had with Goodluck Jonathan, it is not a do-or-die affair.


“The two candidates must toe the line of peace just like Jonathan did when he willingly announced his acceptance of defeat in 2015”.


In their response, Obaseki, who commended the monarch for his fatherly role, said, “I have sworn on oath to protect the people and it will be irresponsible of me to do otherwise, especially that which can lead to the destruction of lives and properties. “


He assured the monarch that he would strive to see that there’s peace in the state.


Ize-Iyamu said he would ensure that his supporters conduct themselves in a peaceful manner throughout the remaining campaign and during the election.


Oshiomhole said as a product of peaceful elections, he would not deviate from that which would lead to a peaceful Poll, assuring the monarch that they heed his counsel.

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Atiku to Buhari: Hike In Electricity Tariffs, Ill-timed, I Reject It

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Former Vice President, Atiku Abubakar has rejected the hike in electricity tariffs by the government of President Muhammadu Buhari.
The Federal Government on Wednesday increased the electricity tariffs from N30.23 per kWh to over N66 per kWh.


Atiku, on Thursday, said he outrightly rejected the increased electricity tariffs, especially as the nation was just coming out of lockdown.
According to him, what Nigerians needed right now was a stimulus, not an impetuous disregard for the challenges they faced.


He said many Nigerians had not earned income for months due to no fault of theirs.
Atiku stated that the increase was ill-timed and ill-advised.


In his words, “I reject the increased electricity tariffs. Coming out of the lockdown, Nigerians need a stimulus, not an impetuous disregard for the challenges they face.


“Many Nigerians have not earned an income for months, due to no fault of theirs. This increase is ill-timed and ill-advised.”

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Death Sentence: Kano Judiciary Submits Case Details To Falana

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Kano State Judiciary says it has submitted certified copies of the Sharia Court judgement to the Human Rights activist, Mr Femi Falana, to enable him to appeal the judgement that sentence Yahaya Aminu to death by hanging for blasphemy.


The development came less than seven days to the expiration of the 30-day grace the court granted the convict to appeal the judgement.
Spokesman of the judiciary, Babajido Ibrahim spoke with newsmen on Thursday in Kano about the development.


Ibrahim said certified copies of the judgement was presented to the Falana’s representative on Wednesday in Kano.
He explained that the Kano State Judiciary received an application by the human right activist, requesting details of the Sharia Court judgement, to enable him appeal the judgement.


“The judiciary received a request from Mr Femi Falana’s representative on Tuesday and certified copies of the judgement were made available to him on Wednesday,” he said.


It will be recalled that a Sharia Court in Kano on August 10, sentence the 30-year-old Yahaya Aminu to death by hanging after his conviction of blasphemy against Prophet Muhammad.


Governor Abdullahi Ganduje, on August 27, indicated his readiness to sign the death warrant, if the convict failed to appeal the judgement at the expiration of the 30-day grace.


Also, Ahmad Magaji, Controller Nigeria Correctional Service (NCS) in Kano State, confirmed that the convict was in custody.

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Ngozi Okonjo-Iweala Takes American Citizenship

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Former Coordinating Minister of Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala has taken American citizenship. This is coming more than 30 years after the former two-time minister studied in the United States.


Okonjo-Iweala actually took US citizenship in 2019 as she fought for the position of the director-general of the World Trade Organization (WTO), Bloomberg reports.


Most of the candidates battling for the position with the Nigerian boast of dual citizenship, which experts believe may boost their chances of getting the much-coveted job.


The other candidates for the position, such as Jesùs Seade Kuri, is Mexican and Lebanese.

Also, Amina Mohammed, a Kenyan Minister, is also Somali and Abdel-Hamid Mamdouh is both Swiss and Egyptian.


Nigerians former finance minister worked in the US for well over 25 years without taking up its citizenship.


However, this affected her when she ran for the president of the World Bank in 2012 because she was not backed by the US, losing the seat to Korean-American Jim Yong Kim.

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2020 Marginal Field Bid Round: Preparation and Submission of Technical & Commercial Bids

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On June 1st, the Department of Petroleum Resources flagged off the 2020 Marginal Field Bid Round. The Bid process is expected to last till December 31st 2020.  The process commenced with the launch of an online portal and registration of interested Companies.

According to Newspaper reports, over 600 companies submitted an expression of interest. By July 22nd 2020, DPR has screened and cleared pre-qualified Companies to participate in the Data prying stage.

This involves paying applicable fees in order to gain access to confidential Field-specific Data set. The information obtained from data prying will be used to prepare technical and commercial Bid proposals.

This paper is dedicated to tackling the difficult and complex issues facing pre-qualified companies their directors, promoters, technical partners, financiers, Lawyers, proxies etc. and all other interested stakeholders participating in the on-going 2020 Bid process.

2020 Marginal Oil Field Bid Round Timeline

AWARD PROCESSDATEPHASE
1. Formal Commencement of Award ExerciseJune 1st – July 4th  2020Registration
2. Launch of DPR Online Portal (www.marginal.dpr.gov.ng) / Issuance of Guidelines, Explanatory notes, Specific requirements, etcJune 1st – July 4th  2020Registration
3.Registration and evaluation of interested CompaniesJune 1st – July 4th  2020Registration
4.Announcement of Pre-qualified Companies
Data prying, Leasing and Purchase of reports
Submission of Technical and Commercial Bids by Pre-qualified Companies
Evaluation of Technical and Commercial Bids
July 5th 2020Pre-qualified Bidder
5.Data prying, Leasing and Purchase of reportsJuly 22nd – Sept 2nd 2020 Pre-qualified Bidder
6.Submission of Technical and Commercial Bids by Pre-qualified CompaniesAug 12th – Sept 2nd 2020Bid Evaluation &
Selection
7.Evaluation of Technical and Commercial BidsSept 2nd – Dec 31st   2020Bid Evaluation &
Selection
8.Announcement of winning bidsSept 2nd – Dec 31st   2020Preferred Bidder

Importance of Technical & Commercial Bid Proposal

One thing Regulators have learnt is that there is a high attrition rate when it comes to Award of Oil & Gas Assets to Local Oil Companies. For instance, between 2000 and 2020, DPR organized four licensing rounds, including one marginal field round.

During the period, most Oil & Gas Assets awarded to Local Oil Companies failed to achieve oil production despite being in possession of License holders for more than a decade.

The reason is that most Awardees lack the technical expertise to develop such Assets. Experience has shown that there is a clear mismatch between the technical expertise of Local Oil Companies and technical know-how required to operate marginal field Assets. For example, out of the 30 marginal fields awarded in 2003, only nine are producing as of 2020.

To redress this anomaly, the latest DPR Guidelines and practice directives place emphasis on technical competence, experience and financial resources of prospective Bidders of Nigerian Oil & Gas Assets.

Unlike the 2003 Bid process, the current regulations mandate upfront Post Award strategy Plans. Regulators are looking not only at pre-qualified Companies ability to raise funds to immediately acquire an asset but further down the road as the bidder must demonstrate a strategy for developing and monetizing the Asset in the near term future.

DPR pays particular attention to the content & quality of technical and commercial bids in arriving at a decision as regards Award of Marginal Field. To submit a winning Bid, pre-qualified companies must dedicate enough time and resource in order to get it right.

Bid proposal submitted by pre-qualified Companies to DPR is in two parts, namely the technical and commercial aspects of developing Marginal Field Asset. Technical proposals dwell on the evaluation of multiple development concepts required for field optimization, work programs, engineering design and installation, etc.

On the other hand, Commercial bids are basically a study of the economic viability of the project. It is a competitive process and in order to get attention, their proposal must stand out from the competition. They can attain this objective by highlighting their background, experience, qualifications, achievement and goals.

A winning Bid must convince regulators that the pre-qualified company is ready to start immediate work. Regulators worldwide take work commitment very seriously.

For instance, Companies that currently hold Oil & Gas assets that are NOT operated in a business-like manner are disqualified from participating in the 2020 bid process.

In Indonesia; prospective bidders are expected to enter performance bonds guaranteeing the fulfilment of technical work programs as a condition for a grant. This ensures that Awardees don’t just abandon Asset thereby denying Government of Oil Tax Revenues. 

In a similar fashion, Nigerian regulators view technical proposals as a kind of commitment on the part of Bidder as to the seriousness with which they will carry out work programs in a timely and expedited manner.

Pre-qualified Companies can access Field dataset which holds Information Memoranda on the specific field they are bidding for, upon payment of following fees;

  • Payment of USD $15,000.00 (Fifteen Thousand dollars) for data prying.
  • Payment of USD $25,000.00 (Twenty Five Thousand dollars) for data Leasing.
  • Payment of USD $25,000.00 (Twenty Five Thousand dollars) for field Specific report.

Technical Bid Proposal

Following Data prying phase, pre-qualified companies will be required to submit field-specific technical and commercial bids based on relevant field data leased from DPR.

It’s a long-standing policy of Government that holders of Oil & Gas Assets must possess technical and financial track records in Exploration & Production operations.

Participating Companies are expected to submit proposals to DPR which demonstrates technical competence of bidders. When in doubt, pre-qualified Companies should contact DPR for correct information on submission requirement, template, format, etc.

A technical bid proposal is a document detailing work activities required to fully develop an abandoned Oil field until it achieves first oil production. The proposal must cover technical specifications such as re-entry work necessary to re-start, develop and put abandoned fields into full production.

A Winning technical bid must detail the most appropriate re-entry work program for the field based on the assessment of Field Dataset. The bid proposal must be very detailed and meet recognized technical specifications.

Technical bids must also contain the proposed commencement date, project duration, projected capital expenditure, plan for recruitment & employment of Nigerian staff, the supply of local goods and services, etc.

A winning Bid must demonstrate the pre-qualified company’s commitment to protect the environment and ensure the safety of personnel during petroleum operations.

Due to the marginality of reserves, there is much uncertainty and anxieties amongst technical personnel as regards the good performance of low yield Fields. A winning Bid must detail the most appropriate extraction technology that will be deployed to work the Asset.

This is important because the commercial viability of Oil & Gas project depends on the ability to maintain crude oil production over the long haul. Projects will experience budget overruns where the operator is unable to resolve technical difficulties associated with crude extraction. 

The calling mark of a winning technical bid is the ability to demonstrate extraction technology capable of delivering oil at optimal outflow rates over a sufficient period of time to fully justify investment costs. To succeed in this regard a winning technical bid must be simple, factual, and exceptional to stand out from the competition.

Pre-qualified Companies can give their proposal further credibility by highlighting work qualifications and experience of their technical staff & partners. Pre-qualified Companies must state Oil & Gas projects supervised, managed or executed by them, their Directors, partners, staff, proxies, etc.

Another way Bidders can win over regulators is if they demonstrate a past experience where they displayed exceptional technical competence. It takes exceptional technical skill to be able to carry out successful Field workovers.

Where possible, pre-qualified Company’s their promoter, director or technical partner must reference previous fieldwork over experience.

Pre-qualified Companies must engage competent technical staff and partners that can both determine the reliability of data and prepare quality bid proposals.

Pre-qualified Companies must understand that the only way they can win over regulators is by backing up their concepts, recommendations and justifications based on well-established Industry practices and Information contained in Field dataset.

Finally, the Bid proposal will be subject to competitive evaluation with other submitted bids. Bidders will win over DPR where they can demonstrate the ability to fully undertake expeditious and efficient development of Marginal field Asset.

Commercial Bid Proposal

A second document that accompanies the technical Bid is known as the Commercial Bid Proposal.

According to DPR guidelines, the commercial proposal shall be submitted alongside technical bid which will be evaluated to assess the optimal field development concepts/plans and its economic viability.

Unlike the technical bid proposal which deals with work programs, the Commercial Bid is more like a Business strategy plan detailing how pre-qualified companies will raise funding, develop, manage and operate the Marginal Field Asset on a profitable basis.

A winning commercial bid proposal must evaluate in great details the economic viability of the entire project. The commercial bid must provide for risk assessment and mitigation strategies that can meet set business development goals. It must explain where the Company sees itself in one year, two or five years from now.

Despite their modest size, there are lots of risks and uncertainties inherent in operating a Marginal Field Asset. A winning proposal must identify and address these concerns. Some of the challenges facing operators include financial risk, operational risk, oil price risk, geological risk, Environmental Consideration and local content compliance, etc.

By its very nature, Oil Business is risky, capital intensive and involves the commitment of substantial upfront investments. Going by the experience of 2003 Awardees, the critical factor for Successful startup of crude oil production was the ability to secure financing.

The eleven revoked 2003 Awardees lost their license primarily because they failed to raise adequate funding for development of Asset. To make matters worse few Local or International Banks are willing to lend monies to small Companies perceived as risky.

A winning Bid must demonstrate to the satisfaction of regulators, the capacity to raise funding required for fully developing Assets. Funding options available to Marginal field License holders include Debt & Equity financing, third party financing, raising monies from capital markets, commodity houses, International Finance Institutions, etc.

There are several factors considered by financiers of oil and gas project before they make firm investment commitments.

A winning bid must consider variables such as fiscal & tax incentives, size of recoverable reserves, oil price, well performance, projected outflow, etc. that go into NPV and ROI calculations.

The way and manner commercial bids are prepared will give regulators an insight into the financial competence of pre-qualified companies. Where in doubt, study and reference the experience of 2003 Awardees and indigenous companies that acquired divestment assets (2010 – 2015).  

Another key issue that must be considered in a winning proposal is demonstrating an ability to manage operational risk. For instance Bidders, their promoters, directors and technical partners can reference a past experience where their managerial competence ensured that an oil and gas project was delivered on cost and schedule.

It is a well-known fact that Oil Business often involves engaging services of third-party service providers. Delays or poor performance by third-party service providers may affect the commercial viability of projects.

One way of demonstrating operational competence is by citing previous experience inability to handle the performance of obligations by third-party service providers.

Pre-qualified companies must have in place proper internal controls and structures such as Company Management Systems (Business and Health, Safety & Environment (HSE) principles, recruitment and training policy, business controls).

The most capable companies are ones that possess good corporate Governance. This will help avoid contentious issues that can lead to partnership litigation disputes which are a major reason for the high failure rate amongst 2003 Awardees.

Good Corporate Governance is also necessary for securing quick financing and helps overcome operational challenges. Corporate Governance issues must be addressed in a winning Bid.

The whole essence of the Marginal Field Program is to develop local capacity in operation of low yield fields. In this regard, a winning bid must detail in house synergy for acquiring oil field management know-how and technology transfer arising from the joint collaboration with foreign technical partners.

Marginal field operations are small scale operations with low operational costs and beak even margins. Investments in marginal fields are low capital commitments with short payback durations. To thrive, Operators of marginal fields must grow their production and development capabilities at scale in order to create substantial value.

Pre-qualified companies need to demonstrate an ability to rein in the capital and operational costs. Winning Bids must demonstrate an ability to manage financial exposure.

At inception, License-holders are basically small companies with little or no track record in petroleum operations lacking physical structures on the ground. In practice, they end up relying on technology partners to run the entire petroleum operations.

Pre-qualified Companies must detail all the variables that go into their decision-making process when it comes to choosing technical partners. They must detail the due diligence verification process carried out on prospective technical partnership.

A winning Bid must demonstrate that both local owned Company and its technical partners are clear on the certainty of terms, roles, responsibility and liability as well as what the technical partner brings to the table.

A winning commercial bid must address oil price risk. Oil Price fluctuation is a key variable that may determine the economic viability of Oil & Gas projects.

The value of an oil and gas asset is not only based on the size of recoverable reserves but also on the International crude oil price. Where the price falls below forecast rates it could have a devastating effect on the profitability of the entire project.

To mitigate this risk, a winning bid must demonstrate contingency plans for hedging arrangement to curtail any unforeseen impact that may arise from adverse exposure to price risk.        

Other Considerations

Marginal Field License Holders are expected to adhere to Local Content Policies in terms of commitment to training and growth of indigenous capability, manpower and local input in provision of goods and services.

To this end, a winning bid must include a comprehensive strategy for training and growth of indigenous capability and manpower.

Another important consideration which a winning Bid must contain is how to engage with host communities. Regulators mandate that host Community engagement Plans shall form an integral part of marginal field development and operations strategy.

Petroleum Operators need to interface with host communities by devising mutually beneficial engagement programs. This involves making investments in community welfare projects such as road construction, youth employment opportunities, electricity installation projects, water & healthcare projects, etc.

The emerging trend amongst Marginal field Owners is to set aside a fixed percentage (ranging from 3 – 5%) of their audited profit for the general welfare of host communities. The fund is used to finance socio-economic development of the populace in the host community.

Finally, pre-qualified companies must ensure that all their promoters, partners, financiers, proxies, etc. are acceptable to the Federal Government. 

At pre-qualification stage, regulators are expected to have conducted detailed due diligence on Companies, their directors, promoter, etc. to determine whether or not they owe Government or are presently operating Assets that are not being operated in a business manner.

The truth is that Regulators can disqualify any Bidder on this basis at any time during the process when new information comes to light.

Article prepared by M.I.B Hassan LL.M (Dundee) BL, the Author of Marginal Oil Fields Policy; The Law, Practice and Emerging Trends available at www.Lkseminars.com.ng 

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