Home News NUPRC faces heat from Senate over wrongful re – allocation of Atala oil field

NUPRC faces heat from Senate over wrongful re – allocation of Atala oil field

by Business News Report

Nigeria Senate is currently probing the Nigerian Upstream Petroleum Regulatory Commission, NUPRC  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). 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 citing case of  lack of assets turn around for the Nation in deriving  maximum value from available resources therein. Against this backdrop, the Senator Ayo Akinyelure, led  Senate Committee on Ethics, Privileges and Public Petitions armed with petitions before it from Bayelsa Oil Company Limited ( BOCL) and Hardy Oil Nigeria Limited then directed the management of NUPRC to as a matter of urgency,  produce written directive from President Muhammadu Buhari on allocation of the field to Halkin  E&P.

Prior to  last week’s session, the Committee had earlier in March this year , hosted the disputants at a public hearing for way out of the complicated matter. Consequently, the  trio of BOCL, Hardy Oil Nigeria Limited  and Century Exploration and Production Limited ( CEPL) which kicked against the revocation, said 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. Following the protest, Governor Douye Diri of Bayelsa State  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 .

 President Muhammadu Buhari had 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).” Following the directive 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 by the Executive Commissioner, Economic Relation and Strategies, Dr Kelechi Ofoegbu who represented the Chief Executive of Nigerian Upstream  Petroleum Regulatory Commission ( NUPRC) at the investigative hearing conducted by Senate Committee on the matter to buttress the decision was futile  as members of the committee asked for written directive given to that effect by President Buhari.

Attempt by Kelechi to convince the Committee headed by Senator Ayo Akinyelure that the inherited action taken by the defunct DPR , was in order fell on deaf ears as the committee insisted that the Presidential Directive which favoured  previous operators was  not followed in the discretionary action taken by DPR. At this point, the  Chairman of the Committee 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 $60million in it as contained in documents before us “. The Committee later got provoked when Kelechi  interjected by dismissing  the $60million invested not to be on oil exploration by any of the previous operators but on equipment. At this point, members  of the Committee like Senators Michael Nnachi , Uche Ekwunife took a swipe at Kelechi by declaring that $60million 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) did not agree with the submissions made by Kelechi of the NUPRC.

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