The Senate has blamed the cancellation of the Atala Marginal oil field (OML 46) in February 2020 by the Department of Petroleum Resources, now the Nigerian Upstream Petroleum Regulatory Commission.
Consequently, he directed the commission to reallocate the oilfield to its original owners as directed by the Presidency.
The Senate’s resolutions followed recommendations made by its Committee on Ethics, Privileges and Public Demands.
The committee chaired by Senator Ayo Akinyelure, on the mandate of the Senate, investigated the petitions submitted by Daniel Chukwudozie on behalf of Hardy Oil Nigeria Limited, Bayelsa Oil Company Limited, Century Exploration and Production Limited to the NUPRC for alleged illegal and fraudulent cancellation. Section Marginal Field (OML 46) and reallocation to Halkin Exploration and Production Limited.
The allocation of the oil field to Halkins as stated in the petition was a violation of due process and Presidential Directive.
The committee after several months of engagement with all stakeholders in the oil field has recommended to the Senate – award to the original owners who are Hardy Oil Nigeria Limited, Bayelsa oil Company Limited and Century Exploration and Production Limited.
The recommendation passed by the Senate committee reads: “The cancellation of the Atala Marginal Field (OML 46) was based on misleading information provided by Halkin Exploration and Production Limited and the NUPRC was unable to provide written evidence that President Muhammadu Buhari actually proved that the owner of the Atala Marginal Field/ As claimed by the NUPRC which reversed its initial directive to reassign operators, the commission strongly recommends that the oil field be returned to the original owners/operators.
“This recommendation is in line with the Presidential directive that was implemented to return the Nine Marginal Areas to their original owners/operators.”
Prior to the Senate resolutions, President Muhammadu Buhari (Retd.) had in October 2022 ordered the NUPRC to reallocate the oil fields to the original owners as Halkins was not a registered company when Hardy Oil Nigeria Limited, Bayelsa Oil Company Limited and Century Exploration and Production Limited they developed the oil field from 2014 to 2018 and acquired a license for its exploration.
Halkin Exploration and Production Limited became an incorporated company on September 9, 2019, as clearly stated in the application and as reflected in the records of the Corporate Affairs Commission.
Controversy over the oil field began on April 6, 2020, when the then regulatory agency, the Department of Petroleum Resources, revoked BOCL’s exploitation license for the marginal oil field due to lack of return on the nation’s supposed assets.
But the trio of BOCL, Hardy Oil Nigeria Limited and Century Exploration and Production Limited contested the repeal on the grounds that as the original operators of the oil field, exploration and production were carried out and royalties paid into the account of the Federal Government. Nigeria and at the time the field was reportedly cancelled, the JV partners had an outstanding 20,700 barrels of crude oil in place.
Governor Douye Diri of Bayelsa State, in the heat of the protest, decided to seek a legal solution to nullify the revocation, especially given the resources already committed by the Bayelsa State government as the owner of 51 percent of the estate.
On the strength of the protest, President Muhammadu Buhari (Retd.), in October 2020, “directed the discretionary reinstatement of canceled licenses, subject to the respective previous operators. Areas subject to technical/financial capability and payment of applicable Property and Valuable Consideration.”
But then the DPR, through a letter dated February 28, 2021, signed by Auwalu Sarki, on behalf of the Minister of State for Petroleum Resources, Timipriye Sylva, awarded the oil field to Halkin Exploration and Production Limited, which was not among the previous ones. operators, resulting in petitions filed against him by the closed operators to the Senate Committee on Ethics, Privileges and Public Petitions.