Atala oil field acquisition legal, Halkin Exploration defends record

The acquisition of Atala Field (Formerly Oil Mining Lease 46) followed due process after its previous owners failed to develop it after 17 years causing the regulator to re-award it to Halkin Exploration and Production Limited, the company has said.

Following calls by the previous owners and a senate committee urging the regulator to cancel the license issued Halkin, the company says it legally applied for the field, was duly awarded it the license to operate and has fulfilled all conditions guiding the acquisition.

Recently, the Atala Field (Formerly OML 46) has been in the news. The license for the oil field was previously issued to the Bayelsa Oil Company Limited (BOCL), Hardy Oil Nigeria Limited (HONL) and Century Exploration and Production Limited.

After failing to develop the field for 17 years with the parties embroiled in dispute, the regulator, then Department of Petroleum Resources (DPR) acting on paragraph 25(1)(a)(ii) of the 1st Schedule to the Petroleum Act, which prescribes revoking licenses for fields that were are not produced, revoked the license.

It was reallocated to Halkin, through a letter dated 7th July, 2021, over the license holder’s inability to bring the Atala Field to production.

The former owners have since been lobbying government officials to cancel the license. President Muhammadu Buhari, in October 2020, in response to the appeal by the Marginal Field Operators Group (MFOG), directed the immediate “reinstatement of the 10 revoked Marginal Field licences, on a discretionary basis, to qualified companies”.

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Ayo Akinyelure, chairman, Senate Committee on Ethics, Privileges and Public Petitions, ordered the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) to follow Buhari’s wishes to return Atala Oil field to the parties whose licenses were revoked.

The NUPRC, which succeeded the DPR, has so far disregarded the directive as it the license issual followed due process. When marginal field license holders fail to bring the field into full production, it would be revoked and returned to the basket for a future bidding round according to the petroleum sector law,

“The Atala Field license was then revoked and returned to the basket as approved by President Muhammadu Buhari,” said Osagie Amusa-Eke, Director of Communications, Halkin Exploration and Production Company.

“When there were petitions to Halkin being awarded the license, Halkin was cleared by NUPRC after a thorough investigation of Halkin’s application process.”

Halkin Exploration was issued the license on the condition that it would bring the field into full production and pay a signature bonus of $8 million dollars paid to the Federal Government.

One year after taking over the field, Halkin Exploration said it has invested millions of dollars into its operations in the field, with over a 100 Nigerian personnel operating on site.

Amusa-Eke said the company has continuously engaged its host communities to foster a peaceful working relationship in its operating environment and concluded Corporate Social Responsibility (CSR) projects like solar lighting initiatives for host communities with plans to do more projects.

The company said it will get this done with its top management team, made up of Nigerians from Bayelsa state and other Niger Delta states.

“As a responsible private company, we are only interested in conducting legitimate business. All that we ask is that Halkin is allowed to do the work we’ve been awarded the license to do,” said Amusa-Eke.