Senate Investigates NUPRC Over Alleged Re-Allocation Of Atala Oil Field

The Atala Marginal Oil Field (OML 46), which the Bayelsa State Government holds, was allegedly wrongfully reassigned to Halkin Exploration and Production Company Limited, prompting criticism of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) in the Senate.

As a result, the Senate Committee on Ethics, Privileges and Public Petitions instructed the management of NUPRC to produce a written directive from President Muhammadu Buhari on the allocation of the field to Halkin E&P in response to petitions it had received from Bayelsa Oil Company Limited and Hardy Oil Nigeria Limited.

On April 6, 2020, the Department of Petroleum Resources, the then-regulatory body, cancelled the operation licence of BOCL on the marginal oil field due to an alleged lack of assets turnaround for the country.

This sparked controversy over the oil field.

The original operators of the oil field, BOCL, Hardy Oil Nigeria Limited, and Century Exploration and Production Limited, however, objected to the revocation on the grounds that explorations and productions had been made, and royalties had been paid to the Federal Government of Nigeria's account.

As of the alleged revocation date, the JV partners still had 20,700 barrels of crude on the site.

In the midst of the protest, Bayelsa State Governor Douye Diri made the decision to take legal action to have the revocation overturned, especially in light of the resources that the state government had already committed to the oil field as owners of 51% stock.

On the basis of the protest, President, Muhammadu Buhari, issued an order in October 2020 directing 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" with consideration for the previous operators of the respective fields.

But the then-DPR awarded the oil field to Halkin Exploration and Production Limited, which was not one of the prior operators, via a letter dated February 28, 2021, signed by Auwalu Sarki, reportedly on behalf of Minister of State for Petroleum Resources, Timipriye Sylva.

As a result, the shut-out operators petitioned the Senate Committee on Ethics, Privileges, and Public Petitions against the decision.

The Executive Commissioner for Economic Relations and Strategies, Dr. Kelechi Ofoegbu, who stood in for the NUPRC Chief Executive, attempted to rationalise the choice, but the committee members demanded a written order from President to that effect.

While Ofoegbu made an effort to persuade the committee, which was led by Senator Ayo Akinyelure, that the inherited action taken by the former DPR was appropriate, the committee insisted that the presidential directive, which favoured the 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.”

Ofoegbu of the NUPRC's arguments were also rejected by Lady Ada Chukwudozie, who was speaking on behalf of Hardy Oil Nigeria Limited (HONL).