What Are Marginal Fields?

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What are Marginal fields?
Marginal Fields are a technical term used to refer to crude oil (or gas) fields that may not produce enough crude to make them economically viable for development at a given time. Because “marginality” arises from the current technical and economic conditions, should such conditions change, such a field may become commercially viable. Economic viability is generally as a result of low reserves, but other factors may potentially make a field uneconomical for production; the geological features of a field can make development difficult. For instance, the development of fields with large deposits of oil sands requires the utilization of unconventional techniques, which is likely to increase cost of production.

Another factor is the current infrastructure, and the cost of extending such infrastructure to the field. Upstream oil, especially in Nigeria, generally deals with large acreages leased by the multinationals for a considerable period of time. Associated infrastructure, like pipelines and terminals, are designed to make total production cost effective for the whole acreage. Some fields may be excluded if the cost of extending infrastructure is unrecoverable. Other potential factors are the viscosity of the crude, the current market conditions and the current fiscal regime, among others.

Initially the 1969 Petroleum Act , which forms the basis of all upstream production in Nigeria, did not make reference to marginal fields as an area of
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