Collaboration as a Development Support Strategy for Marginal Oil Field Development in Nigeria

Abstract

In 2018, the Nigerian government launched the Marginal Field Bid Round, offering 57 marginal oil fields to local and international investors to increase the participation of indigenous companies in the upstream sector of the oil and gas industry in order to increase production, and generate revenue for the government. The purpose of the study is to examine collaboration as one of the success strategies for marginal oil field development in Niger Delta. Collaboration is working together to achieve a common goal. It involved separate companies working towards shared or common goal, collaboration can often be an important source of competitive advantages. It helps in pooling of resources to make capital available for marginal oil field operation. This study adopted a literature review and multiple case studies of AFREN Plc, Frontier oil limited and Universal Energy limited in the development of Okoro, Setu field, and Qua Iboe field to highlight the role of collaboration in the development of marginal oil field. The method adopted was qualitative method using literature review and multiple case study to highlight the role of collaboration in the development of marginal oil field. The findings showed that the successful development of marginal oil fields is possible through joint cooperation among the stakeholders of the oil and gas industry. Collaboration in terms of infrastructure sharing, knowledge sharing, and strategic partnership improve the performance of marginal oil field development. The overall result revealed that collaboration in form of strategic alliance and partnership is a driver or development support strategy for marginal oil field development. This research study recommends creation of an enabling environment for investment, for example the political environment, community challenge and security for marginal field investment in Niger Delta. The government should ensure that there is stable macroeconomic policy and efficient legal system that allows for contract to be enforced and support access to channels to arbitration.