Senate knocks NUPRC over Atala oil field re-allocation

The Nigerian Upstream Petroleum Regulatory Commission came under fire in the Senate over an alleged wrongful re- allocation of Atala Marginal Oil Field (OML 46) owned by the Bayelsa State Government to Halkin Exploration and Production Company Limited.

Consequently, the Senate Committee on Ethics, Privileges and Public Petitions, on grounds of the petitions before it from Bayelsa Oil Company Limited and Hardy Oil Nigeria Limited, directed the management of NUPRC to produce a written directive from President Muhammadu Buhari on the allocation of the field to Halkin E&P.

Controversies started over the oil field on April 6, 2020, when the then regulatory agency, the Department of Petroleum Resources, revoked the operating license of BOCL on the marginal oil field over an alleged lack of assets turnaround for the nation.

But the trio of BOCL, Hardy Oil Nigeria Limited, and Century Exploration and Production Limited kicked against the revocation on the grounds that as original operators of the oil field, explorations and productions had been made and royalties paid into the account of the Federal Government of Nigeria and that as at the time the field was purportedly revoked, the JV-partners had an outstanding 20,700 barrels of crude on the site.

Governor Douye Diri of Bayelsa State, in the heat of the protest, resolved to seek legal redress in overturning the revocation, especially in consideration of the resources already committed to the oil field by the Bayelsa State government as owners of 51 per cent equity.

On the strength of the protest, the President, Major General, Muhammadu Buhari (Retd.), in October 2020, directed the immediate “reinstatement of the revoked licenses on a discretionary basis to qualified companies 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.”

But the then DPR, through a letter dated February 28, 2021, signed by Auwalu Sarki, reportedly on behalf of Minister of State for Petroleum Resources, Timipriye Sylva, awarded the oil field to Halkin Exploration and Production Limited, which was not among the previous operators, leading to petitions filed against it to the Senate Committee on Ethics, Privileges and Public Petitions by the shut-out operators.

Efforts made by the Executive Commissioner, Economic Relation and Strategies, Dr Kelechi Ofoegbu, who represented the Chief Executive of NUPRC to rationalise the decision, proved abortive as members of the committee requested a written directive given to that effect by Mr President.

While Ofoegbu attempted to convince the committee headed by Senator Ayo Akinyelure that the inherited action taken by the defunct DPR was in order, the committee insisted that the presidential directive which favoured previous operators was not followed in the discretionary action taken by DPR.

Akinyelure said, “NUPRC which is now the new regulatory agency. It is not expected to take sides 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.

“Perhaps, in running away from the facts 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. What this committee wants from NUPRC, being the inheritor of DPR, is the written presidential directive on the oil field award to Halkin E&P and nothing more.”

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