OML 46: Bayelsa Government, others sue for return of oilfield

Sequel to an apparent wakening by key stakeholders in the Niger Delta region to show greater presence in the nation’s oil bloc ownership industry, the Bayelsa State Government has stepped up bid to reclaim ownership of Atala Marginal Oilfield in the state.

Dependable sources informed that the state government is currently pursuing the revalidation of the licence for Atala Marginal Oilfields on Oil Mining Lease (OML) 46 earlier revoked by the Department of Petroleum Resources (DPR) in April 2020.

It was among ten other marginal fields believed to have been repossessed by the Federal Government, after they were awarded to indigenous stakeholders in 2013, reportedly on grounds of the failure of the indigenous oil firms to keep the oilfields operational.

OML46 asset held by Bayelsa State Government, through Bayelsa Oil Company Limited, is located within onshore swamps in Bayelsa State and was won in 2013 through a bidding process conducted by DPR, before it was recently revoked for alleged dormancy.

A Pan Ijaw group known as Movement for the Survival of the Izon Ethnic Nationality (MOSIEND) who first expressed concern over the takeover of the asset , said the federal government action was without warning, and therefore, unfair.

Speaking on the development, MOSIEND President, Mr Kenneth Tonjo-West, said that the revocation of OML46 license duly bided and won by Bayelsa State was without genuine and verifiable reasons. Tongo-West argued that that the oilfield had already commenced test production after full development of the assets and was ready for commercial production just before the asset’s repossession.

He explained that the alleged grounds for revocation cannot be taking seriously since Bayelsa State and few other states in the Niger Delta are no stranger to oil exploration having already been in control of natural resources deposited in their land.

His words, “It was this oil field that gave Bayelsa the right of oil prospecting license. It was also based on it that the state established the Bayelsa Oil Company Limited, and they have produced about 1,000 barrels of crude for evaluation and hence the position that the field has remained dormant is false.

“We have borne brunt of oppression and marginalization for more than half a century, there is no commensurate development in our land following the discovery of oil in commercial quantity,” he said.

News Agency of Nigeria, recently reported that Bayelsa State Commissioner for Information, Mr. Ayiba Duba, explained that the government is pursuing an amicable resolution of the issues that necessitated the oilfield revocation.

NAN further report that checks at the OML 46 field indicate that the oilfield operated by Bayelsa Oil Company had been developed up to test production with a crude cargo of 1,000 barrels awaiting evacuation, as the oil company awaits the nod of DPR to commence commercial production.

The State Commissioner for Information said the state had reviewed the development and decided to work with relevant agencies of the federal government and put measures to meet the requirements in the checklist.

“As a government we are not antagonistic about the revocation because there are many others and some of them have gone to court to challenge the decision, we are not part of them, rather we are seeking an amicable resolution.

“We took time to review the checklist and update the regulatory agencies of steps we have taken to meet the set criteria, and we are hoping to be successful in the ongoing bid for the marginal field license.

“With the level of collaboration and commitment of the present administration, the marginal field would commence commercial production as soon as the license is re-validated because we have fixed all pending issues,” Duba said.

Bayelsa State Government through the Bayelsa Oil Company holds 40 per cent equity in the oil block along with other investors who operate the field.  Sources in DPR say a marginal field is an oil block with confirmed reserve up to 10 million barrels of crude oil.

The federal government as part of its policy of growing the participation of Nigerians in the oil sector decided to return all marginal fields previously held by International Oil Companies (IOCs) to Nigerian oil firms.

Meanwhile, DPR recently announced the commencement of the 2021 marginal oilfield bid round, noting it has shortlisted a total of 161 bids for the final stage of the bid process, for 57 oilfields.

Head, DPR Public Affairs, Paul Osu, announced the development said that due to the COVID-19 pandemic, the bidding exercise, which includes expression of interest/registration, pre-qualification, technical and commercial bid submission and bid evaluation, was conducted electronically.

It will also be recalled that DPR first announced the commencement of the bid rounds in June 2020, 18 years after the last bid round that was conducted in 2002.