OPLs withdrawal: Abuja Court agrees with NUPRC, declines determining firm’s N100 million fine suit

Story Highlights

• Abuja Court has declined to determine a N100 million fine suit against NUPRC.
• The case concerns the withdrawal of OPLs.
• The lawsuit will now proceed in Lagos

The Federal High Court, Abuja has agreed with the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), in declining to determine a N100 million lawsuit instituted against the Commission which bordered on its oil prospecting licenses (OPL).

Justice Inyang Ekwo delivered the ruling on Wednesday in a suit filed by NJ Exploration Limited against NUPRC over the alleged withdrawal of its oil prospecting licences (OPLs) 321 and 323 by the NUPRC.

The OPL is granted by Nigeria’s Minister of Petroleum Resources to an applicant company that is registered for oil exploration and production business in Nigeria.

What transpired in court

Nairametrics previously reported that the NJ Exploration lawyer, Ahmed Raji (SAN), had claimed that his client was part of two consortia of companies to whom OPLs 321 and 323 were respectively awarded by the Department of Petroleum Resources, via letters dated 20th October 2020.

According to him, his client was shocked to have its OPL withdrawn by the defendant on the grounds of revenue concerns, among others.

The plaintiff, which is an oil exploration company, also contended that it did not receive any default notice from the NUPRC before receipt of the OPLs withdrawal letter.

Raji asked the court to restore its OPL so it can continue with its oil business.

Raji had sought,

“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.”

But in NUPRC’s motion on notice dated May 2, 2024, and seen by Nairametrics, its counsel, Ojukwu Chikaosolu SAN told the court to decline to determine the case.

He submitted that while the firm initiated the suit before the Court in Abuja, one Owel Petroleum Services Limited as Plaintiff had already brought an action at the Lagos Judicial Division of the Court in Suit No. FHC/L/CS/2233/2022, in respect of the same OPLs 321 and 323 in dispute.

He argued that NJ Exploration who is a defendant in the case in Lagos, also filed its defence in the said action supporting the NUPRC’s revocation and re-award of the said OPLs 321 and 323.

He submitted that for the firm to run to Abuja amid the pendency of a similar suit in Lagos, amounts to an abuse of court.

Chikaosolu stated,

“During the pendency of the said Suit No. FHC/L/CS/2233/2022, the Claimant/Respondent purports to bring this current action against the Defendant/Applicant in gross abuse of judicial process.

“The parties, facts, and subject matter in Suit No. FHC/L/CS/2233/2022 are the same as the subject facts, subject matter, and parties in the present suit and this present suit constitutes a multiplicity of actions regarding the same subject matter to wit; OPLs 321 and 323,” he prayed.

Nairametrics reported that the NUPRC legal team urged the Court to either transfer the matter back to its Lagos division where it is already been determined in its favour or dismiss the applicant’s suit.

What the judge said

Ruling on their submissions on Wednesday, Justice Inyang Ekwo was of the opinion that the subject matter of the present case is intertwined with the subject matter of the matter pending in the Lagos Division of this Court.

“In other words, there is a direct nexus between the two matters”, he said.

He agreed with NUPRC that the matter ought to be transferred to the Lagos Division of this Court to be heard and determined together with the one pending in that division.

The judge subsequently declined to determine NJ exploration’s case as requested by NUPRC.

“I hereby make an order referring this matter forthwith to the Chief Judge who has the power to direct the matter be transferred to the Lagos Judicial Division for adjudication,” the judge ruled.

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.

When the OPL is granted to a licensee,  it empowers a company 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.