Revelation: Senate investigates alleged wrongful re-allocation of oilfields

In an effort to get accountability in oil sector, the Senate has directed the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) to show proof of Presidential directive for revocation and reallocation of the Atala Marginal Oil field (OML 46), owned by Bayelsa State government, to Halkin Exploration and Production Company Limited (Halkin E&P).

The directive followed Senate’s investigation into the reallocation.

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 Bayelsa Oil Company (BOCL) over alleged lack of assets turnaround for the nation.

But the trio of BOCL, Hardy Oil Nigeria Limited and Century Exploration and Production Limited (CEPL) kicked against the revocation on the ground that, as original operators of the oil field, exploration and production have been made and royalties paid into the account of the Federal Government, and that, as at the time the field was purportedly revoked, the joint venture 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 to overturn the revocation, especially considering the resources already committed to the oil field by Bayelsa, as owner of 51 per cent 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 previous operators of the respective fields, subject to demonstration of technical/financial capacity and payment of applicable Good and Valuable Consideration (GVC).”

But DPR, through a letter dated February 28, 2021, signed by Auwalu Sarki, purportedly on behalf of Minister of State for Petroleum Resources, Timipre Sylva, awarded the oil field to Halkin E&P, which was not among the previous operators, leading to petitions filed before the Senate Committee on Ethics, Privileges and Public Petitions.

Efforts by the Executive Commissioner, Economic Relation and Strategies, Dr. Kelechi Ofoegbu, (who represented the Chief Executive of NUPRC at the investigative hearing conducted by the committee) to rationalise the decision, proved abortive, as members of the committee requested evidence of written directive 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 the 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 side on the disputed oil field.

“Since DPR was inherited by NUPRC, the new agency must furnish this committee with written directive from President Buhari, upon which award of the Atala oilfield 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 the 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 to violate Mr. President’s clear-cut directive. DPR, which is now NUPRC, must provide written Presidential directive on the Atala marginal oilfield 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.”

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