Atala Oil Field: NUPRC Under Fire In Senate Over Wrongful Re-allocation Of Contract

Nigerian Upstream Petroleum Regulatory Commission, NUPRC, came under fire in Senate at the weekend over alleged revocation and wrongful re– allocation of Atala Marginal Oil field (OML 46) owned by Bayelsa State Government to Halkin Exploration and Production Company Limited (Halkin E&P) .

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

Trouble over the oil field started on April 6, 2020 when the then regulatory agency , Department of Petroleum Resources (DPR), revoked the operating licence of BOCL on the Marginal Oil Field on alleged lack of assets to turn around for the Nation in deriving maximum value from available resources therein.

But 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 account of the federal government of Nigeria and that as at the time the field was purportedly revoked, the JV-partners have 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% equity.

On the strength of the protest, President Muhammadu Buhari in October 2020 directed the immediate “reinstatement of the revoked licences 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 (GVC).”

But the then DPR 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 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 Nigerian Upstream Petroleum Regulatory Commission (NUPRC) at investigative hearing conducted by Senate committee on the matter to rationalise the decision, proved abortive as members of the committee requested for written directive given to that effect by Mr. President.

While Kelechi spiritedly attempted to convince the committee headed by Senator Ayo Akinyelure (PDP Ondo Central), that the inherited action taken by the defunct DPR, was in order, the committee insisted that the Presidential Directive which favours previous operators, was not followed in the discretionary action taken by DPR.

Specifically, the chairman of the committee said: “NUPRC, which is now the new regulatory agency that you represent here, 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 a written Presidential directive on the oil field award to Halkin E&P and nothing more .

“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 it awarded to Halkin with attendant enormous financial loss inflicted on previous operators, one of which had invested $60million in it as contained in documents before us.”

Kelechi incurred the wrath of the committee when he interjected by dismissing the $60million invested not to be on oil exploration by any of the previous operators but on equipment.

Irked by the submission, members of the committee like Senators Michael Nnachi (PDP Ebonyi South), Uche Ekwunife (PDP Anambra South), etc, descended on him by declaring that $60million invested on equipment clearly shows the competence and capability of the now rejected operators to handle the oil field.

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

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