OPLs withdrawal: Firm seeks N100 million fine against NUPRC  

A oil and gas firm named NJ Exploration Limited has asked the Federal High Court, Abuja, to award the cost of N100 million against the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) over the latter’s withdrawal of its oil prospecting licences (OPLs) 321 and 323.

The request, among others, are detailed in a suit marked FHC/ABJ/CS/334/2024, dated March 12,2024, and seen by Nairametrics on Thursday.

The applicant’s lawyer, Ahmed Raji (SAN), claimed that his client was part of two consortia of companies to whom OPLs 321 and 323 were respectively awarded to by the Department of Petroleum Resources, via letters dated 20th October 2020.

He noted that his client was shocked to have its OPL withdrawn by the defendant on the grounds of revenue concerns, among others.

The senior lawyer argued that though the NUPRC is empowered to recommend to the Minister of Petroleum, the revocation and suspension of petroleum licenses or leases should be in line with Section 96 (1) (a)-(n) of the Petroleum Industry Act, 2021.

The plaintiff, which is the oil exploration company, contended that it did not receive any default notice from the defendant prior to receipt of the OPLs withdrawal letter.

Raji stated,

• “The Plaintiff avers that the aforesaid award letters contained terms and conditions which the respective Licensees [of OPLs 321 and 323] were to fulfil before their rights in, and over the said licences can crystallize.
• “However, owing to the Licensees’ inability to fulfil the said terms and conditions, their licenses were revoked sometime in 2022.
• “The Plaintiff averrs that it was after the aforesaid Licensees failed to remedy the default complained of in the Default Notice of 21 January 2022, that their licenses were revoked; making the said OPLs, [ie., 321 and 323] available for re-award.
• “Consequent on the preceding averment, the Plaintiff avers that sometime in December 2022, it was re-awarded the said OPLs 321 and 323 by the Defendant, through its letter of 28th December 2022, with reference number: NUPRC/AM/3717/S589/VI/36.
• “Given the preceding averment, the Plaintiff avers that it was shocked to receive a letter dated 22 January 2024, from the Defendant withdrawing OPLs 321 and 323 from it.
• “The Plaintiff avers that in its aforesaid letter of 22 January 2024, the Defendant gave the non-diligent prosecution of Suit No: FHC/CS/L/2233/2022 between Owel Petroleum Services Limited v. N.J Exploration Limited & Anor., and the loss of value occasioned by the “subsisting forbearance” which it granted to the Plaintiff vis-à-vis the dire economic need of the Federal Government to generate revenue, as the reasons for withdrawing the OPLs.”

Reliefs sought

Raji urged the court to declare that the grounds for the revocation of an OPL of a company are as outlined in Section 96 (1) (a)-(n) of the Petroleum Industry Act, 2021.

He also asked the court to nullify the defendant’s withdrawal of its OPLs 321 and 323.

Via a motion on notice, the lawyer also wanted the court to restrain the defendant or any other governmental agency from re-awarding the said OPLs 321 and 323 to any other person pending the determination of the case.

He maintained that his client’s OPLs should not be withdrawn until the five- year duration of the said licenses as contained in the defendant’s letter of award dated 28th December 2024.

Other reliefs sought include:

• ” A Declaration that the Defendant’s withdrawal of Oil Prospecting Licences [OPLs] 321 and 323 from the Plaintiff, vide its letter of 22nd January 2024, did not follow the strict procedure for revoking an Oil Prospecting Licence, as laid out in Section 97 of the Petroleum Industry Act, 2021; and therefore, illegal, null and void.
• “An Order setting aside the Defendant’s withdrawal of Oil Prospecting Licences [OPLs] 321 and 323 from the Plaintiff, vide its letter of 22nd January 2024; for being in breach of the provisions of Section 96 and/or Section 97 of the Petroleum Industry Act, 2021.
• “The cost of this action assessed at N100,000,000.00 [One Hundred Million Naira] only.”

Nairametrics gathered that Justice Inyang Ekwo of the Federal High Court, Abuja, has fixed Friday, May 3, 2024, to hear the applicant’s motion on notice against NUPRC.

What you should know

•  NUPRC is a Federal Government agency responsible for ensuring compliance with petroleum laws, regulations and guidelines in the upstream oil and gas sector, in Nigeria.
• The OPL is granted by the Nigeria’s Minister of Petroleum Resources to an applicant company registered for oil exploration and production business in Nigeria.
• The license granted to a licensee is what empowers it to conduct extensive oil exploration activities in an area.
• Since the action is based on the law, the Federal High Court has jurisdiction to interpret the relevant laws that apply to the instant case.