Reps summon Minister, DPR, others over marginal fields revocation

*OML 54
*Query questionable award to Eurafric’s partner

Nigeria’s House of Representatives has commenced investigation into the revocation of the Dawes Island marginal fields awarded to Eurafric Energy, and has ordered the Minister of State for Petroleum Resources, the Director of the Department of Petroleum Resources (DPR), and all parties in the Dawes Island marginal field programme to appear before it by June 30, 2021.

The House of Representatives’ Committee on Public Petitions, who issued the summons at the initial hearing of the petition brought before the House of Representatives by Eurafric, also directed all parties to submit all relevant documents supporting their arguments on the issue, ahead of their appearance before the committee on the stated date.

Chairman of the committee, Honourable Jerry Alagbaoso, explained that the committee was not interested in taking sides, but is concerned with ensuring a peaceful and amicable resolution of the controversy and also ensure that every party get justice.

The petitioner, Eurafric, was represented at the preliminary hearing by its Group Managing Director, Mrs. Heather Onoh and its Managing Director, Mr. Onoriode Odjegba, while the Minister of State for Petroleum Resources, Chief Timipre Sylva, was represented by the Director of the DPR, Engineer Sarki Auwalu.

In the petition, Odjegba informed the committee members that the Dawes Island marginal field in Oil Mining Lease (OML) 54, in Okrika, offshore Rivers State, was awarded to the company in 2004, noting that due to restiveness in the Niger Delta in the years that follow, the company was unable to access the field, which made it to suspend the Field Development Plan (FDP) and other activities around the field till 2011, when peace returned to the Niger Delta region.

He said its inability to access the field other challenges were communicated to the DPR.

He noted that the return to the field was completed in June 2016, and that the company had spent $35 million on the field so far, and was able to produce 60,000 barrels of crude oil, a percentage of which were sent to the terminals.

He added, however, that the company was shocked when in April 2020, at the height of the COVID-19 lockdown, the DPR revoked the award to the company, ignoring the fact that the company met a number of the parameters the government had set; the money spent by the company on the field so far, and the production milestone achieved.

He said: “During the recent marginal fields bid round, our field was almost added, but we went to court and got the DPR not to include our field. Afterwards, after a series of meetings with the Minister of State for Petroleum, we were advised to withdraw the issue from the court; which we did. DPR confirmed the withdrawal of the case from the court, and said it would consider the issue.

“After withdrawing the case, we wrote series of letters to DPR and the Ministry of Petroleum Resources (MPR), the Minister of State for Petroleum Resources, on the terms of reinstatement of our license. We did not get any response.

“We now heard that one of our partners, Petralon Energy, who registered a new company, Petralon 54 Limited, had gone behind the back of the two other partners and secured licence for the Dawes Island.”

To this end, Odjegba said Eurafric is praying the House of Representatives to stop the DPR and the MPR from awarding the Dawes Island marginal field to Petralon Energy, Petralon 54, to a third party or any other company.

He also urged the House of Representatives to direct the DPR and MPR to call or invite the previous licensee, that is all the parties to the award, to discuss the terms of reinstatement of the award to Eurafric, and also prevail on the DPR and MPR to reinstate the licences of the field to Eurafric.

In his response, Director of the DPR, Engineer Sarki Auwalu, called on the House of Representatives to discard the petition as it is lacking merit, especially as the revocation was in line with the Petroleum Act and the field had been termed non-performing.

He stated that within the time of award of the field to the company and revocation, which is a period of 16 years, within which the award was extended twice for a period of five years each, Eurafric failed to provide a Field Development Plan and also failed to continuously produce from the field.

He noted that the field have a potential for 12 million barrels of crude oil and that the company was expected to have produced at least one million barrels since then.

He argued that claims by the company that restiveness in the Niger Delta prevented it from accessing the field was false, as other fields within the same locality and the country in general, continued to produce crude oil during these periods.

He also stated that one of the partners in the field, Petralon had in 2018, petitioned the DPR and the Minister of State for Petroleum Resources, alleging mismanagement of the field, hence its inability to produce.

However, Odjegba responded that the company was on the verge of producing the field development plan, and that the company had in November 2019, received a letter from the DPR extending the award of the field, before it again received another letter in April 2020, revoking the award.

He said: “The FDP process is in stages: first is well re-entry, next is test, establish maximum flow rate, efficient flow rate and then, package a submission to DPR. We had done all that was needed, just as we were on the verge of submitting the FDP, we got the revocation letter.

“It is also pertinent to note that in November 2019, DPR extended our licence, but turnaround to revoke it in April 2020, when we could not move around to submit anything. So, if in November, you were able to dispassionately appraise our performance and extend the field licence, what now changed between November 2019 and April 2020, that you suddenly, without further engagement or notice, decide to revoke the field licence?”

Auwalu clarified that “the letter of extension was fraudulently written by a staff of the DPR; by one Okonkwo, and sent to the company. On realizing this, the staff was queried and suspended, and the letter of extension was recalled. We found out that there was an exterior motive.”

Also, responding to the committee’s query on why would the DPR and MPR revoke a licence for non-performance of the parties awarded the field, and yet re-award it to one of the partners accused of non-performance, Auwalu said it was at the discretion of the minister, noting that the rule said that if there is a partner that is found capable, the partner should be awarded the field.

Auwalu added that: “The action of the DPR and the honourable minister regarding the revocation of the Dawes Island marginal field is exercising the powers of the minister, which is currently the president, in line with the Petroleum Act.

“We wish to state that between the time of award and revocation, Eurafric, over 16 years, did not make significant progress to attain crude oil production and the claim of the expenditure as stated in the company’s petition is actually fictitious without technical basis and justification and is only intended to mislead the public and the legislatures. The petition lacks merit and should be discarded.”