Nigeria: Oil And Gas Licensing Round For Marginal Fields 2013

On November 28, 2013, Nigeria's Department of Petroleum Resources (DPR) announced the 2013 Marginal Fields Licensing Round, a new licensing round for marginal fields blocks in previously explored and frontier regions of the country. The DPR has now released a set of guidelines that provide details on the process, stages and application requirements for companies interested in taking part in the 2013 Marginal Fields Licensing Round (the Guidelines).1 This update provides an overview of some of the Guidelines' key contents.

What is on offer?

There are 31 marginal fields being offered in the 2013 Marginal Fields Licensing Round (16 onshore and 15 offshore). A comprehensive list and details of the fields are available on the DPR website.

Bidding process

The bidding process commenced on December 12, 2013, and is being conducted in six key stages:

  • Submission of application by interested companies; (December 12, 2013, − January 3, 2014)
  • Evaluation of submitted prequalification applications; (January 6−7, 2014)
  • Announcement and notification of prequalified companies by email; (January 17−24, 2014)
  • Submission of detailed technical and commercial bids by prequalified companies; ( Feb. 21−March 7, 2014)
  • Evaluation of technical and commercial bids; (3 weeks → March 7−28, 2014) and
  • Announcement of winning bids (April 11, 2014).

The overall process is anticipated to be completed in less than six months.


To be eligible, a company must be a registered Nigerian company. In addition:

  • at least 51% of the beneficial interest of the company must be owned by Nigerian citizens;
  • no single shareholder may own more than 25% of the shares in the company;
  • the company must have upstream oil and gas experience; and
  • the company's memorandum and articles of incorporation must authorize the company to conduct oil and gas exploration and production activities.

Foreign companies may participate in the process by either incorporating a Nigerian branch with the Corporate Affairs Commission of Nigeria in line with the above eligibility requirements, or by entering into joint venture arrangements with one or more local Nigerian companies. According to the DPR, the Nigerian government will be favourably disposed to joint applications.


Application forms can be downloaded from the DPR website. The application must be accompanied by a Certificate of Incorporation of the applicant company, Form CAC 7 (Particulars of Directors), Form CAC 2 (Statement of Share Capital), Tax Clearance Certificate for the past three years, and the application fees.

The fees are US $1,600 (application fee) and US $3,200 (processing fee). Applicants wishing to access data would be required to pay additional fees of US $3,000 (data prying), US $15,000 (data leasing) and US $2,000 (data management service fee). These fees are payable per field.

Each company can bid for a maximum of three fields with each field requiring a separate application. Complete application packages are due by January 3, 2014. They may be submitted to the DPR office in Lagos, Nigeria, or to the London, UK, office of the Nigerian National Petroleum Corporation (NNPC).

A committee comprising representatives of DPR, leaseholders and financial advisers will assess the submissions with the aim of identifying the company most likely to be successful in operating the marginal field as well as further developing the Nigerian oil industry. Companies that are prequalified are notified and given further instructions on how to prepare and submit a more detailed technical and commercial bid.


Nigeria has the largest oil and gas reserve base in Sub-Saharan Africa with an estimated 37 billion barrels of oil and 180 Tcf of gas. Currently, over 1,000 oil fields have been discovered with only 35% producing. To maximize the production capacity, diversify oil production sources, increase oil and gas reserves, and prevent waste, the Nigerian government has since 2001 promoted the licensing of marginal fields.

Marginal fields are generally fields discovered by large international oil companies or the state-owned NNPC and which, due to other pressing investment options, were either not developed or relinquished. These fields represent promising investment potential for junior companies with streamlined operations.

Reports suggest that these fields may hold an estimated two billion barrels of oil. For example, 24 fields were awarded in the first licensing round for marginal fields (which was completed in 2003). Since then, over 100 million barrels have been produced from these fields. Currently, eight are still producing (averaging an aggregate gross production of 27,200 barrels of oil per day and 35 million standard cubic feet per day of gas) while the others are in various stages of development. Calgary-based and TSX Venture-listed Canadian companies such as Mart Resources Inc. and Oando Energy Resources are currently significant players in marginal field investments in Nigeria.

The 2013 Marginal Fields Licensing Round provides new opportunities for Canadian oil companies to enhance their investment portfolio in Africa and Nigeria. The attractive risk/reward profile of investing in Nigeria has traditionally included the country's numerous proven/undeveloped field opportunities, high quality of crude oil produced, established infrastructure for transportation and export of oil, and incentive-based fiscal regime (including lower sliding-scale royalties and substantially reduced petroleum profit taxes).

As described above, foreign companies may participate in the 2013 Marginal Fields Licensing Round by either incorporating a Nigerian branch in line with the eligibility requirements or by entering into joint venture arrangements with one or more local Nigerian companies. Furthermore, based on historical experience, it is likely that joint venture opportunities will arise after the licensing round in respect of awarded fields, since the DPR allows the successful parties to bring in financial and technical partners to jointly develop and produce the fields.


1. Department of Petroleum Resources, "Guidelines for the Allocation and Operation of Marginal Fields, 2013," available at

Norton Rose Fulbright Canada LLP

Norton Rose Fulbright is a global legal practice. We provide the world's pre-eminent corporations and financial institutions with a full business law service. We have more than 3800 lawyers based in over 50 cities across Europe, the United States, Canada, Latin America, Asia, Australia, Africa, the Middle East and Central Asia.

Recognized for our industry focus, we are strong across all the key industry sectors: financial institutions; energy; infrastructure, mining and commodities; transport; technology and innovation; and life sciences and healthcare.

Wherever we are, we operate in accordance with our global business principles of quality, unity and integrity. We aim to provide the highest possible standard of legal service in each of our offices and to maintain that level of quality at every point of contact.

Norton Rose Fulbright LLP, Norton Rose Fulbright Australia, Norton Rose Fulbright Canada LLP, Norton Rose Fulbright South Africa (incorporated as Deneys Reitz Inc) and Fulbright & Jaworski LLP, each of which is a separate legal entity, are members ('the Norton Rose Fulbright members') of Norton Rose Fulbright Verein, a Swiss Verein. Norton Rose Fulbright Verein helps coordinate the activities of the Norton Rose Fulbright members but does not itself provide legal services to clients.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.