The Ministry of Petroleum is set to open up marginal oil field bid round scheduled to take place later this year; a total of 23 acreages will be up grabs, the Ministry is considering setting aside some of the oil blocks for discretionary award to firms owned by South Sudanese indigenes, in order to restore peace in the oil-rich region and give its citizens a sense of ownership in South Sudan’s oil wealth.
As South Sudan again embarks from reconstruction after a very destructive war- The Ministry of Petroleum is putting in all the necessary efforts to enthrone open, transparent and competitive bid rounds in the award of oil blocks.
Available data indicates at least 15 of the marginal fields in the forthcoming bid round are promising and if developed could produce 15,000 to 20,000 barrels per day of oil equivalent (bpoe).
Government’s decision to dispose off the marginal fields is due international oil companies (IOCs) abandonment of significant acreages unappraised and while others were left to lie fallow for long periods even after oil discoveries, largely because of the outbreak of war, yet also some other fields were not commercially viable for the oil majors to deploy their expensive technologies and resources.
Under the guidelines for the forthcoming marginal field bid round, interested investors will be required to pay $20,000 each for a Competent Persons Report (CPR).
The CPR will require bidders to provide details of their shareholding structure, names of their directors, track record in the oil and gas sector, audited financial statements, partnership and/or collaboration with indigenous firms, and financial resources to bid and pay for the oil acreages.
After the CPR stage, investors will also pay $10,000 each as data mining fees to enable them gain access to the relevant data on the acreages that will be placed on offer.
At this stage of the process, investors will be availed information on the size of the fields, seismic surveys, and past appraisals conducted by IOCs, among other relevant information.
After the data mining stage, the DPR will commence the technical evaluation of the bids submitted by the firms, during which several investors which fail to meet the criteria will be dropped.
Investors that have passed the technical evaluation process will then be invited to submit their commercial bids in a process that will be open to the public.
Expectedly, the oil acreages will go to the highest bidders who will be given a timeline within which to pay for the oil acreages.
Where a bidder fails to meet the payment terms, the second bidder (reserve bidder) will be invited by the DPR to take up the block.
Furthermore,successful bidders in the forthcoming exercise will be expected to confirm their willingness to pay $200,000 as signature bonus.
It is a must have that any company interested in acquiring any of the marginal fields in the next bid round be registered solely for exploration and production business.
This is to avoid the mistakes of the past where companies with no track record in E&P operations were forced into marriages even when they were not compatible.
The signature bonus shall be paid within 90 days of the date of the award. Any successful company that fails to pay the signature bonus at the expiration of the 90 days will be issued a revocation notice, which shall last for 30 days.
If the company still fails to pay at the expiration of the 30 days, the allocation will be automatically revoked and it will be offered to the bidder that came second in the bid round.
All bidders will be expected to submit their South Sudan content plan to demonstrate the commitment of the company in local manpower development and patronage of indigenous service providers.
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