Senate Probes NUPRC over Alleged Illegal Re-allocation of Atala Oil Field

* Committee demands presidential order from regulatory agency

Sunday Aborisade in Abuja 

The Senate Committee on Ethics, Privileges and Public Petitions has directed the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) to forward to it President Muhammadu Buhari’s orders empowering the agency to re-allocate the Atala Marginal Oil Field in Bayelsa State to another firm. 

The NUPRC came under fire in the Senate over its  alleged revocation and illegal re-allocation of Atala Marginal Oil field (OML 46) owned by the Bayelsa State Government to Halkin Exploration and Production Company Limited (Halkin E&P).

The Senate panel, acting on the petition before it from the Bayelsa Oil Company Limited ( BOCL) and Hardy Oil Nigeria Limited, directed the management of NUPRC, to produce written directive from President Buhari on allocation of the field to Halkin E&P. 

Crisis on 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 turnaround for the nation in deriving maximum value from available resources therein.

However, the trio of BOCL, Hardy Oil Nigeria Limited and Century Exploration and Production Limited (CEPL), kicked against the revocation.

They claimed that as original operators of the oil field, explorations and productions have been made and royalties already paid into the account of the Federal Government of Nigeria.

They also claimed that as of 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  strenght of the protest, President Buhari, in October 2020, directed the immediate “reinstatement of the revoked licences on a discretionary basis to qualified companies”.

In doing so, Buhari said consideration should be 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).

The then DPR, through a letter dated February 28, 2021, and signed by Auwalu Sarki, purportedly on behalf of the 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.

The development led to the petitions filed against it at the Senate Committee on Ethics, Privileges and Public Petitions by the shutout 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 an investigative hearing conducted by Senate Committee on the matter to rationalise the decision, proved abortive.

Members of the committee requested a written directive given to that effect by Mr President.

While Kelechi made sprited attempt 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.

Akinyelure said: “NUPRC which is now the new regulatory agency that you represent here, is not expected to take side on the disputed oil field.

“Since DPR is inherited by NUPRC, the new agency must furnish this committee with 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 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.

“What this committee wants from NUPRC being the inheritor of DPR, is 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 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 $60 million in it as contained in documents before us.”

Kelechi made members of the committee angry when he interjected by dismissing the $60 million 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 $60 million 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.

The various parties are expected again at the Senate panel this week. 

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