Nigeria: Court Restrains Govt From Auctioning Eight Marginal Fields

(file photo).
4 June 2020

Justice Chukwujekwu Aneke of the Federal High Court in Lagos has restrained the federal government from selling or accepting bids for eight Marginal Oil Fields (Oil Mining Licences) pending determination of a suit challenging their status.

The judge gave the order wednesday following a suit filed by 10 oil firms against the Minister of Petroleum Resources, Attorney General of the Federation and Minister of Justice, and the Director, Department of Petroleum Resources (DPR) are respondents in the suit.

The firms and their marginal oil fields include: Independent Energy Ltd - Ofa OML 30; Associated Oil and Gas Ltd/ Dansaki Petroleum Unlimited - Tom Shot Bank OML 14; Bayelsa Oil Company Ltd - Atala MFOG-2C and Bicta Energy and Management System Ltd - Ogedeh OML 90 MFOG-2D.

Others are: Del Sigma Petroleum Ltd - Ke OML 90 MFOG-2E; Goland Petroleum Ltd -Oriri OML 88 MFOG-2F; Sahara Energy Ltd/African Oil and Gas Ltd - Tsekelewu OML 40 MFOG-2G and Sogenal Ltd Akepo - OML 90 MFOG-2H.

The judge restrained the respondents from advertising a bidding process for the marginal fields which were awarded to the applicants, or selling them.

The judge further granted an interim injunction authorising the applicants "to continue to manage, operate, control, explore... the marginal fields pending the hearing and determination of the substantive suit."

The federal government in April 2020 purportedly revoked 11 firms' oil licences to operate marginal fields.

The DPR had announced the commencement of the 2020 marginal field bid round, involving 57 marginal fields, including 11 fields revoked by the DPR.

This prompted the oil firms to file a suit at the court to challenge the revocation and applied for an interim injunction restraining the minister and the ministry from organising a bidding process for the marginal fields.

Their counsel, Tayo Oyetibo SAN, George Ikoli SAN and Uche Nwokedi SAN argued that they have invested hundreds of millions of US dollars, in the full expectation that they would continue conducting their operational activities on their respective fields for the remaining life span of each of the fields.

"The plaintiffs have made huge investments in their respective fields with a cumulative value of more than $290,000,000 from the year 2004 to April 2020 towards the development of their respective fields," they stated

The lawyers also stated that the purported revocation of their awards of marginal fields by the government violated their constitutional rights to fair hearing, their rights under the Petroleum Act and under the guidelines governing marginal fields in Nigeria.

They urged the court to halt the attempt by the federal government to include the affected marginal fields in the next bidding rounds for award of marginal fields as it recently announced pending the determination of the substantive suit.

After listening to the lawyers, Justice Aneke in granting the motion on notice, noted that the respondents did not file any process in opposition and were also not represented by any counsel in court though they were also served with hearing notices that the matter was adjourned for hearing on June 3, 2020.

The court then adjourned the matter to June 29, 2020 for hearing of the substantive suit.

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