Wale Igbintade
The Federal Government, through the Ministry of Petroleum Resources and the Minister of Petroleum Resources, has asked the Court of Appeal, Lagos Division, to set aside a Federal High Court judgment that restored the Dawes Island Marginal Field licence to Eurafric Energy Limited, arguing that the company failed to develop the oil asset and achieve commercial production despite holding the licence for about 17 years.
The request is contained in the appellants’ Brief of Argument filed in Appeal No. CA/LAG/CV/362/2026.
Represented by Adebayo Ologe, the Ministry and the Minister are challenging the judgment delivered on January 29, 2026, by Justice Abimbola Awogboro of the Federal High Court, Lagos, which granted all 17 declaratory and injunctive reliefs sought by Eurafric Energy Limited.
The Federal Government argued that the trial court erred in restoring the licence, maintaining that Eurafric failed to fulfil the primary objective for which the marginal field was awarded.
According to the appellants, the Dawes Island Marginal Field was allocated to Eurafric in February 2003 under the Federal Government’s Marginal Field Programme, with the expectation that the company would develop the field and commence production within five years.
However, the government contended that despite receiving multiple extensions over the years, Eurafric failed to bring the field into commercial production.
The appellants stated that the company was granted extensions in 2011 and 2016 but still failed to meet the required production milestones.
They also relied on a 2015 performance evaluation, which reportedly classified Eurafric among operators that had shown “little or no commitment” to developing their marginal field assets.
The government further argued that when the final extension was granted in 2016, Eurafric was expressly informed that it represented the company’s last opportunity to bring the field into production and that failure to do so would result in the withdrawal of the licence.
Although Eurafric subsequently conducted an Extended Well Test between 2016 and 2018 and extracted 62,039 barrels of crude oil, the Federal Government maintained that the exercise did not amount to commercial production.
According to the appellants, commercial production under applicable petroleum regulations requires compliance with additional technical, operational and regulatory requirements beyond the extraction of crude oil during a testing phase.
The government argued that the trial court failed to properly appreciate the distinction between an Extended Well Test and commercial production.
The appellants also challenged the lower court’s finding that the revocation of Eurafric’s licence in April 2020 was unlawful.
They contended that the court wrongly relied on provisions of the Petroleum Industry Act (PIA) 2021 in determining issues that arose before the legislation came into force.
According to the government, the revocation was carried out pursuant to the Petroleum Act, which vested the Minister of Petroleum Resources with the discretion to withdraw licences where operators failed to meet prescribed obligations.
The appellants therefore urged the appellate court to set aside the judgment and uphold the legality of the licence revocation.