Atala  Oil Field: NUPRC Under Fire in Senate over wrongful re – allocation

….As Senate Ethics, Privileges and Public Petitions Committee demands for Presidential directive on action

By Haruna Salami

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC), came under fire and scrutiny  in Senate last Friday over alleged revocation and wrongful re-allocation of the Atala Marginal Oil field (OML46) owned by the trio of Bayelsa Oil Company Limited, owed by Bayelsa State Government, Hardy Oil Nigeria Limited and Century Exploration and Production Limited 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  Hardy Oil Nigeria Limited, directed the Management of NUPRC to produce the written directive from President Muhammadu Buhari, being the Minister of Petroleum, directing it to allocate 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 the Atala JV Partners on the Marginal Oil Field over alleged inability to bring the Atala Field to production

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.

It will be recalled that President Muhammadu Buhari had, sometime in October 2020, in response to the appeal by the Marginal Field Operators Group (MFOG),  directed  the immediate “reinstatement of the ten revoked Marginal Fields  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 defunct DPR (now NUPRC) 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 that breach of Mr. President’s directive to the Senate Committee on Ethics , Privileges and Public Petitions by the Atala JV Partners, the previous operators and the rightful beneficiaries of the presidential leniency .

At the resumed hearing on Friday, 30th October, 2020,  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 made frantic effort to rationalise the decision,  but abortive as members of the Committee requested for written directive given to that effect by President Buhari.

While Kelechi spiritedly attempted to convince the Committee headed by Senator Ayo Akinyelure (Ondo Central), that the inherited action taken by the defunct DPR, was in order, the committee insisted that the Presidential Directive which favors  the return of the field to the previous operators, was not followed in the discretionary action taken by DPR. The Committee frowned at apparent partiality of Dr. Kelechi Ofoegbu’s presentations in favor of Halkin.

Specifically, the Chairman of the Committee said “NUPRC which is now the new regulatory agency that you represent here l, 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, which it awarded to Halkin with attendant enormous financial loss inflicted on previous operators who have expended enormous resources, most of which were borrowed from the banks to develop the field”

Dr. Kelechi Ofoegbu further incurred the wrath of the Committee when he interjected by dismissing  the $60 million which Halkin allegedly claimed to have invested in the field when he stated that Halkin  invested the said fund in the procurement of  equipment and not on the Atala Field, but the Committee had countered him by stating that the defunct DPR had in its letter to the Hon. Minister of State for Petroleum Resources stated as follows: “Halkin stated that in 2019, the company through one of its subsidiary companies received the approval of the Board of Bayelsa Oil Company Limited (BOCL –former Operators of Atala Field) to farm into 41% of the field through the execution of Farm-In Agreement and Field Management Services Agreement with BOCL. The company claims to have invested over Sixty Million US Dollars ($60,000,000.00) to revive the asset in the process”.

The Committee equally reminded him that Halkin had also averred in an affidavit which it submitted to a Federal high Court in its suit against the National Assembly to have invested sixty million dollars in the development and operations of the Atala field, a claim which contravened his claims before the Committee and in NUPRC’s report.

Irked by the submission, members  of the Committee notably Senators Michael Nnachi (Ebonyi South) , Uche Ekwunife (Anambra South), etc , descended on him for making such irreverent submissions that contradicted the documents before the Committee.

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

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