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Nigerian Senate Probes Petroleum Regulatory Commission Over Wrongful Allocation Of Oil Mining Lease to Halkin Oil

October 2, 2022

It was gathered that the allocated oil field is owned by Bayelsa State Government, Hardy Oil Nigeria Limited and Century Exploration and Production Limited.

The Nigerian Senate has begun probing the wrongful allocation of the Atala Marginal Oil Field to Halkin Exploration and Production Company Limited.


It was gathered that the allocated oil field is owned by Bayelsa State Government, Hardy Oil Nigeria Limited and Century Exploration and Production Limited.


However, the trio of BOCL, Hardy Oil Nigeria Limited, and Century Exploration and Production Limited (CEPL) fought the revocation because as the oil field's original operators, explorations and productions had been made, and royalties had been paid to the Nigerian government's account. Additionally, the trio argued that as of the time the field was allegedly revoked, the JV partners still had 20,700 barrels of unfinished crude on the site.


In March, SaharaReporters reported that the Senate was investigating how OML 46 was illegally awarded to Halkin Exploration and Production Company Limited, by the defunct Department of Petroleum Resources (DPR), in contravention of the presidential directive.


The Senate Committee on Ethics, Privileges and Public Petitions, while interfacing with the groups involved at a public hearing on Tuesday, 22nd March 2022, was informed that, after the revocation of the oil field, the presidency intervened, considered the numerous petitions from the various marginal owners and directed that the fields be rewarded on a discretionary basis with preference to the previous owners, including the Atala Oil Field.


Hence, based on petitions from Hardy Oil Nigeria Limited that were before the Senate Committee on Ethics, Privileges, and Public Petitions, the committee on Friday directed the management of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) to produce a written order from President Muhammadu Buhari, who is the minister of petroleum, ordering it to assign the field to Halkin E&P.


Meanwhile, President Buhari had 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" sometime in October 2020 in response to the appeal by the Marginal Field Operators Group (MFOG).


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 


Specifically, the Chairman of the Committee said, "NUPRC which is now the new regulatory agency that you represent here, is not expected to take a side 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 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 a 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 $60million which Halkin allegedly claimed to have 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 ( PDP Ebonyi South), Uche Ekwunife ( PDP 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's session, the Committee earlier in March this year hosted the disputants at a public hearing to find a way out of the complicated matter.