Fresh findings at the weekend have revealed that a Joint Venture partner in the Oil Mining Lease (OML) 46 licence, known as Atala oil field in Bayelsa state, had, few months to the revocation of the oil licence, made an appeal to the erstwhile industry regulator, the Department of Petroleum Resources (DPR), on the need to intervene and manage the asset (OML 46) in the “interim.”

According to documents sighted by The Nation, the JV partner, Century Exploration and Production Limited (CEPL), the technical and financial services provider with an “80 percent participatory / funding interest” in the joint venture partnership, had written the DPR via a letter dated October 3, 2019, seeking the “urgent intervention of the DPR to manage this asset in the interim due to risk / exposure on this asset (OML 46); the non-alignment of JV partners and the continued loss of revenue to the Federal Government of Nigeria and all stakeholders,” following unresolved disagreements and the inability to bring the Atala marginal oil field to full production. Others in the JV were the Bayelsa Oil Company Limited (BOCL) and Hardy Oil Nigeria Limited.

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A year before CEPL’s letter, the oil field licence, which was first awarded to the BOCL in 2003, had expired in 2018, following the expiration of an extension granted the firm on the licence in April 2016. It was subsequently revoked in line with the country’s petroleum laws. It was also gathered that the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), which has since replaced the DPR, via a letter dated April 6, 2020, had explained that the revocation of Atala field was because BOCL and its JV partners “failed to develop the field and bring it to full production before the expiration of the granted extension period which elapsed on 30th April, 2018.”

A source close to the transaction but who pleaded for anonymity, however revealed that the JV partners had the opportunity of regaining the revoked licence given that the NUPRC, in an earlier correspondence, had given BOCL the opportunity to reapply for the revoked licence. It was said that the BOCL, however, did not take the opportuinity and the OML 46 licence was returned to the basket as approved by President Muhammadu Buhari.

Consequently, NUPRC awarded the OML 46 licence to Halkin Exploration and Production Limited (HEPL), on the condition that the new awardee would bring the field into full production before the expiration of the licence. A signature bonus of over $8 million was subsequently said to have been paid to the Federal Government by the new awardee at that time.

For now, the “Red Chambers” in the National Assembly is the battleground for which the BOCL and its JV partners are seeking a revocation of the licence granted to HEPL.

The revocation struggle, Kayode Dada, an economist and operator in the oil sector, noted that the OML 46 brouhaha portend negativity for investment in the country. “This will likely create a problem for new investments into the Nigerian oil and gas sector as the industry will be seen as one without law and order,” Dada said.