FG hands over Bayelsa oilfield to new operator

The federal government has granted approval for the handing over of Atala oilfield, a revoked asset formerly owned by the Bayelsa state government, to a new operator, Halkin Exploration and Production Limited.

In April 2020, the Department of Petroleum Resources (DPR) announced the revocation of 11 of the 13 marginal oilfields licences it had issued to indigenous oil companies — including the Atala oilfield.

The field, oil mining lease (OML) 46, was granted its first licence in 2003.

The federal government said the oilfield was poorly handled leading to dormant operation for several years.

In December 2020, the state government said it was pursuing revalidation of OML 46 licence.

According to ThisDay, the transfer of the oilfield ownership was approved after Sarki Auwalu, director of DPR, copied a memo to Timipre Sylva, minister of petroleum, notifying him of the directive which had been approved by President Muhammadu Buhari.

It said the information is contained in a letter titled “Application to Assign the Atala Marginal Field (OML 46) to Halkin” with reference to PRES/88/MPR/72.

It added that the request was approved by the minister who commented to that effect.

The letter to the minister noted that Buhari had approved that the marginal fields be re-awarded on a discretionary basis to qualified companies with consideration given to the previous operators of the respective fields subject to the demonstration of technical and financial capacity and payment of applicable good and valuable consideration (GVC).

“The Honourable Minister of State Petroleum Resources (HMSPR) is respectfully invited to note that Halkin Exploration and Production Limited (Halkin) has expressed its interest in Atala marginal field which is one of the revoked assets,” the letter reads.

“Halkin stated that in 2019, the company, through one of its subsidiary companies, received the approval of the board of Bayelsa Oil Company Limited (former operators of Atala field) to farm-in to 41 per cent of the field through the execution of farm-in agreement and field management service agreement with BOCL.

“The company claims to have invested over $60,000,000: 00 to revive the asset in the process. The company further states that the decision to submit an expression of interest on the field was based on the review of an independent audit of the asset’s reserve and Competent Persons report.”

Auwalu informed Sylva that the GVC was calculated on a base case of $40/bbl which amounted to $8,087,129.86.

He said the department’s assessment of Halkin indicated that the company has the potential to immediately bring the field to production and progress.

Auwalu said the DPR considered the re-awarding of the oilfield to Halkin Exploration and Production Limited, subject to the payment of the calculated consideration within 45 calendar days, in line with the president’s approval.