Atala Oil Field: Senate Committee Demand Presidential Directive Over NUPRC Wrongful Re-allocation

Atala Oil Field: Senate Committee Demand Presidential Directive Over NUPRC Wrongful Re-allocation

The Senate Committee on Ethics and Privileges and Public Petitions has demanded a purported directive given by the presidency for the allocation of an oil field by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).

The Senate had lashed out at the NUPRC over alleged revocation and wrongful re-allocation of the Atala Marginal Oil field ( OML 46) owned by the trio of Bayelsa Oil Company Limited, owed by Bayelsa State Government, Hardy Oil Nigeria Limited and Century Exploration and Production Limited to Halkin Exploration and Production Company Limited ( Halkin E&P).

Senate, Muhammadu Buhari, Oil field, Senate committee, Nigerian government
The Senate has issued a strong directive to the Management of NUPRC. Photo: Nigerian Senate
Source: UGC

The Senate committee on grounds of petitions before it from Hardy Oil Nigeria Limited directed the management of NUPRC to produce the written directive from President Buhari, being the Minister of Petroleum directing it to allocate the field to Halkin E&P.

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Trouble over the oil field started on April 6, 2020, when the then regulatory agency, the Department of Petroleum Resources (DPR), revoked the operating licence of the Atala JV Partners on the Marginal Oil Field over alleged inability to bring the Atala Field to production.

However, the trio of BOCL, Hardy Oil Nigeria Limited and Century Exploration and Production Limited ( CEPL) kicked against the revocation on the grounds that as original operators of the oil field, explorations and productions have been made and royalties paid into the account of the Federal Government.

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It was also gathered that at the time the field was purportedly revoked, the JV-partners have an outstanding 20,700 barrels of crude on the site.

In October 2023, President Muhammadu Buhari, in response to the appeal by the Marginal Field Operators Group (MFOG), directed the immediate reinstatement of the ten revoked Marginal Fields licences, on a discretionary basis, to qualified companies.

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This was done with consideration given to the previous operators of the respective fields subject to the demonstration of technical/financial capacity and payment of applicable Good and Valuable Consideration (GVC).

But the defunct DPR (Now NUPRC) through a letter dated February 28, 2021, signed by Auwalu Sarki, purportedly on behalf of Minister of State for Petroleum Resources, Timipriye Sylva, awarded the oil field to Halkin Exploration and Production Limited which is not among the previous operators, leading to petitions filed against that breach of the president’s directive to the Senate committee.

At the resumed hearing on Friday, October 30, 2020, the executive commissioner of the Economic Relations and Strategies, Kelechi Ofoegbu who represented the chief executive officer of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) at the investigative hearing conducted by the Senate committee on the matter effort to rationalise the decision, proved abortive as members of the Committee requested for written directive given to that effect by the president.

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While Kelechi attempted to convince the Committee headed by Senator Ayo Akinyelure ( Ondo Central ), that the inherited action taken by the defunct DPR, was in order, the committee insisted that the Presidential Directive which favours the return of the field to the previous operators was not followed in the discretionary action taken by DPR. The Committee frowned at the apparent partiality of Kelechi Ofoegbu’s presentations in favour of Halkin.

Speaking on the matter, the chairman of the committee said:

"NUPRC which is now the new regulatory agency that you represent here, is not expected to take a side on the disputed oil field.
"Since DPR is inherited by NUPRC, the new agency , must furnish this Committee with a written directive from President Buhari, upon which award of the Atala Oil Field was made to Halkin E&P and not previous operators as clearly stated in the presidential directive quashing the revocation.

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"Perhaps, in running away from the fact and getting away with the oil field award, Halkin stopped appearing before this committee after previous appearances by resorting to litigation in the court of law."

The chairman also noted that what the committee wants from NUPRC as DPR's inheritor is a written Presidential directive on the Oil Field award to Halkin E&P and nothing more.

He said:

"It is wrong for an implementing agency to hide under discretion, in violating Mr President's clear cut directive. DPR which is now NUPRC must provide a written Presidential directive on the Atala Marginal Oil Field which it awarded to Halkin with attendant enormous financial loss inflicted on previous operators who have expended enormous resources, most of which were borrowed from the banks to develop the field”

The committee reminded Ofoegbu that Halkin had also averred in an affidavit that it submitted to a federal high court in its suit against the National Assembly to have invested $60 million in the development and operations of the Atala field, a claim which contravened his claims before the Committee and in NUPRC’s report.

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Irked by the submission, members of the committee including Senators Michael Nnachi ( PDP Ebonyi South), and Uche Ekwunife ( PDP Anambra South ) among others descended on him for making such irreverent submissions that contradicted the documents before the committee.

Ada Chukwudozie who represented Hardy Oil Nigeria Limited ( HONL), also took exceptions to submissions made by Kelechi of the NUPRC.

Before the Senate session, the committee had earlier in March this year, hosted the disputants at a public hearing for a way out of the complicated matter.

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