Market report: Nigeria is tentatively awarding bids for 57 fringe fields

The weekly market report is provided by Gladius Commodities of Lagos, Nigeria. Download the full report here. Learn more about Gladius Commodities at


The federal government has tentatively issued tenders to develop 57 of its marginal oil fields, which could earn the government $ 500 million in signature awards. The Department of Petroleum Resources sent preliminary award letters requesting payment within 45 days in order to secure the awards that companies can pay in either dollars or naira for the first time.

Fringing fields are smaller blocks of oil that are typically developed by local companies. Nigeria seeks to produce in the fields in order to bolster public finances and increase local participation in the oil sector, which makes up most of the country’s foreign exchange. The 57 fields of the current auction were started in June 2020 and are part of the first field round for almost 20 years.

The Group Managing Director of Nigeria’s National Petroleum Corporation, Alhaji Mele Kyari, has called for a legal framework with clear physical conditions to enable the nation to exploit the full potential of its gas resources in the country’s deep-water areas.

The call came at a one-day public hearing on “Inclusion of Gas Terms in Production Share Agreements (PSCs)” organized by the House of Representatives Joint Committee on Gas Resources, Petroleum Resources (Upstream and Downstream). Kyari noted that investors need clarity about tax terms so that they can raise capital for gas development projects. He stated that a functional framework that provides a clear picture of how investors can get capital back from investments and generate profits is required, as set out in the Petroleum Industry Bill (PIB) for gas usage. He expressed the hope that the PIB would help resolve issues related to tax conditions in the PSK as the current contracts mainly concerned crude oil production and not gas. In addition, Kyari identified good physical environment and pricing as two important conditions for gas conditions inclusion in the PSCs.

The Minister of State for Petroleum Resources, HE Timipre Sylva, also committed himself to the use of gas by car owners in the country at the public hearing. Minister Sylva said a task force to achieve this would be inaugurated shortly. The task force is to sit down and discuss the details of implementing the program. Regarding household or household gas, the minister added that the country was also pushing for the distribution of household gas outside cities and into rural areas.


Tullow Oil Plc announced that it hopes to accelerate debt repayment after crude oil prices hit a year high. Tullow had $ 2.4 billion in net debt and was one of the oil companies to be carried by the recent price hike as demand gradually rebounded from the unprecedented plunge in 2020. Tullow’s shares are up more than 80% this year as the company begins to turn its back on a troubled period of drill setbacks, management departures, falling prices, and rising borrowing. Chief Executive Officer Rahul Dhir, who took over in July 2020, puts the explorer’s assets in West Africa at the center of an investment plan aimed at cutting costs and propping up the balance sheet. Dhir suggested accelerating debt repayment by stepping up drilling in West Africa and adding an oil rig if crude oil prices remain strong. The company has already planned four wells in Ghana from April.


Crude oil prices rose on March 11, mainly due to signs of an improvement in the economic outlook, an intensified vaccination program and a sharp decline in US gasoline inventories. The U.S. West Texas Intermediate Crude Oil futures rose $ 1.58 at $ 66.02 after hitting a high of $ 66.08 while the Brent Crude Oil futures rose at 2:43 p.m. ET (Jan. : 43 GMT) traded at $ 1.71 at $ 69.61. The US Energy Information Administration in its weekly March 10 report showed that crude oil inventories rose 13.798 million barrels for the week ending March 5, contrary to analyst expectations for a construction of 816,000 barrels. The previous week’s build was 21.5 million barrels, even above the 19.2 million barrels increase in the week ended April 10, 2020 when oil demand cratered during the COVID-19 outbreak.

Biden’s $ 1.9 trillion stimulus, one of the largest economic bailouts in US history, put crude oil prices on a solid base, which fell more than 3% in the first two days of the week. The correction was driven by concerns that the late October oil rally could go up as much as 85% over the past four months.

The oil traders pushed all these concerns aside and shipped crude oil in a nightly resettlement deal in Asia. The rally was extended during European hours on Thursday and continued into the US session as the President prepared to sign the bill. The rebound in oil prices over the past two days has come despite government data suggesting US crude production recovered faster than the refinery after the storm-related outages in Texas last month. In a monthly report, the Organization of Petroleum Exporting Countries said that demand in 2021 will increase slightly by 5.89 million barrels per day, or 6.5% from the previous month. However, the group has cut its forecast for the first half of the year.

Comments are closed.