Connect with us


12 Facts And Issues Surrounding The Revocation And Re-award Of OML 46 (Atala Field)



The Nigerian oil and gas ecosystem has been, largely, the exclusive preserve of the International Oil Companies since Shell-BP struck oil in commercial quantities in Oloibiri.

The first time Nigerians had the opportunity to participate in the oil and gas industry was in the late 70s when indigenous grants were given to Henry Stevens Company promoted by Chief Henry Fajemirokun and Nigus Petroleum promoted by Alhaji Ado Ibrahim. There was also the Niger Delta Oil Co but none of the three brought their blocks to production

Dubri Oil has the rare distinction of being the first Nigerian oil-producing company following its acquisition of the Giligili field in a concession from Philips Oil Company Ltd. in 1987.


However, it was not until 1991 that Professor Jubril Aminu, the Minister of Petroleum at the time, awarded eleven (11) oil blocks to Nigerian entrepreneurs on a discretionary basis. That bid round threw up Mike Adenuga’s Consolidated oil (now Conoil) as the most significant success story.

By 2003, the Obasanjo administration upped the ante with the award of 24 marginal fields to 31 companies. Of those 24 fields only 10 were brought to production and some of those licences were revoked. One of the revoked licenses is operated by Bayelsa Oil Company Limited (BOCL), OML 46 (Atala) field.

Why was the BOCL Asset not as successful as Mid-western? And why is Bayelsa state finding it difficult to get back the Asset? Read on to discover some baffling facts and reasons how former public administrators of a people’s common wealth are planning to appropriate assets belonging to a whole state.

  1. OML 46 was discovered by Shell in 1982. When the marginal field round was announced by the OBJ administration in 2003, OML 46 was among fields thrown into the basket to be bid for by interested indigenous owners. Bayelsa government under late Chief D.S.P Alamieyeseigha and Dr. Goodluck Jonathan put in a bid for OML 46 as a means of making Bayelsa a participant in the oil and gas sector and shoring up the state’s revenue. The state won and set up Bayelsa Oil and Gas Company Limited (BOCL). Delta state had interest in Mid-western OML 56 while Akwa Ibom had interest in Stubb Creek OML 14.
  2. The initial plan was to have Shell manage the field on behalf of the state and a management deal was signed in 2004. That deal was vacated in July 2005 when BOCL signed a farm-in agreement with Hardy Oil for the management of the Atala Marginal Field. BOCL eventually terminated the contract with Hardy and in 2011 awarded same to Century Exploration and Production Limited (CEPL) an indigenous company as Technical Services Provider. CEPL which received 35% equity (later reduced to 29%) made quick progress and brought the field to a 1,000 bopd at test production level and was waiting for Department of Petroleum Resources (DPR) approval to evacuate when issues cropped up.
  3. At inception, the development and production plan for the Atala field by the JV partners received incredible support from the Government, but the tenure of the succeeding administration marked the beginning of a series of challenges for the Atala field. The management of BOCL was sacked and replaced at will and the Atala field development project was adversely affected by this continuous interference. This continued without respect to the farm-in agreement between the partners or consideration of the investment and commitment of CEPL which bears 100% of BOCL’s financial responsibilities on the project.
  4. The succeeding administration frustrated the efforts of CEPL to fully finance the work through unreasonable and unwarranted denial of project strategy and necessary approvals. Rather, a revocation plot was designed and orchestrated by elements and emissaries within the government as a strategy to take up the asset for the personal benefit of their principal and themselves.
  5. Due to the substantive work already done by BOCL in collaboration with the JV partners, on OML 46, Atala field, despite the frequent unwarranted and unreasonable politically motivated interference by the government, DPR renewed its license in 2013 for another 7 years and work continued but the interference did not abate.
  6. With the License renewed, the administration of the day continued to play musical chairs with the hierarchy at BOCL with the government trying every trick and strategy at their disposal to make sure the field didn’t progress from test phase to full production operations.
  7. CEPL (the technical partners of BOCL) which was now being owed millions of dollars in production and field expenses was frustrated and had no means to compel the state government to stop meddling.
  8. The Operating License of the Atala field (OML 46) eventually expired. With the expiration of the license, the DPR formally announced on April 6, 2020 the Revocation of the Marginal Oilfield License it issued to Atala Oil Field on the grounds that the BOCL JV did not turn the asset around for the nation to derive maximum value from available resources. This decision was taken without consideration of the fact that the Atala field (OML 46) has been developed, crude oil produced and sold from the same field at different stages of test crude production. Royalties on crude oil sold from the field had been paid to the Federal Government several times before revocation.
  9. The succeeding Governor, H.E Douye Diri, upon assumption of office expressed a resolve to seek legal redress in overturning the revocation especially in consideration of the resources already committed to the Atala field by the Bayelsa state government as owners of 51% equity in the Atala Marginal Oilfield. His protest soon led to the Federal Government approving and directing the immediate “reinstatement of the revoked Licenses 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).” With this approval by the FG, Bayelsa state government looked forward to taking back their asset in OML 46. But this is where the whole story gets very interesting and curious.
  10. Through a letter dated February 28, 2021, from the DPR and signed by Auwalu Sarki, the Minister of State, Petroleum Resources was urged to re-award OML 46 to Halkin Exploration and Production Limited, a company owned by former Governor Dickson, the same governor who was in office when the licence for the Atala field expired and was revoked. The DPR informed the minister that Halkin claims to have “in 2019 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-in to 41% of the field through the execution of Farm/in agreement and Field Management Service agreement with BOCL. The company claims to have invested over sixty million US dollars (US$60,000,000:00) to revive the asset in the process.” The company was incorporated in 2019; so how did it make such an investment in the Asset.
  11. The memo from DPR has led to many questions: If Halkin had indeed executed a farm-in agreement with BOCL, why did former Governor Dickson allow a company he had interest in to lose its licence? Secondly, DPR noted in its letter that “Halkin E& P” “has the potential to immediately bring the field to production and progress with full development of the asset including the drilling of more wells and production/utilization of the field’s gas resources” when there is no evidence to prove the assertion. Thirdly, how did BOCL hand over 41% to Halkin E&P” without recourse to JV partners identifiable in the Farm-in Agreement of 2011? Fourth, why hand over Atala, OML 46, to “Halkin E& P” instead of to Bayelsa state?
  12. The facts surrounding this Asset highlight a grand fraud orchestrated by a few desperate and uninformed individuals on the administration and execution of petroleum contracts. The victims of this grand deception are the Federal Government of Nigeria, the Government of Bayelsa State, DPR & the investors of Halkin E & P who were presented with fraudulent documentation to support their scheme that is now a source of embarrassment to a system that has been busy building character and goodwill. Obviously, the Federal Government is investigating how it was deceived into making a decision that undermines its readiness to attract, and earn the trust of investors globally; it must go on to make the findings of the investigation public and clear the names and image of all those innocently cowed by the forged documentations that formed the basis of the re-award of the Atala field (OML 46).