Federal Government Seeks Appeal on Marginal Field License Reinstatement
The Federal Government, represented by the Ministry of Petroleum Resources, has formally requested the Lagos Regional Court of Appeal to overturn a recent ruling that reinstated the Dawes Island marginal field license to Eurafric Energy Limited. This action arises from the government’s assertion that Eurafric has not successfully developed the oil property or achieved commercial production despite holding the license for nearly 17 years.
The government’s appeal is documented in Appeal No. CA/LAG/CV/362/2026. Acting on behalf of Minister Adebayo Oroge, the Ministry of Petroleum Resources is contesting the January 29, 2026 ruling made by Justice Abimbola Awogboro of the Federal High Court in Lagos. The court had granted all 17 of Eurafric Energy Limited’s requested declaratory and injunctive reliefs.
The federal government contends that the trial court made an error in reinstating the license, arguing that Eurafric has failed to fulfill the primary objective set for the marginal field. Initially assigned to Eurafric in February 2003 under the federal government’s Marginal Field Program, the expectation was that the company would develop the field and commence production within five years.
However, the government claims that, despite multiple opportunities for extension, Eurafric has not brought the field into commercial production. The appellants highlighted that extensions were granted in both 2011 and 2016, but the company still did not meet the necessary production milestones.
Supporting their argument, the appellants referenced a 2015 performance review, which reportedly categorized Eurafric as having “little or no involvement” in the development of marginal field assets. They further noted that during the last extension in 2016, Eurafric was explicitly informed that it was their final chance to initiate production, with a warning that failure to do so would lead to the revocation of their license.
Although Eurafric undertook extended well tests from 2016 to 2018, which resulted in the extraction of 62,039 barrels of oil, the federal government maintains that this effort did not equate to commercial production. The appellants argue that commercial production must comply with a range of technical, operational, and regulatory requirements that extend beyond mere extraction during test phases.
The federal government claims the trial court failed to appropriately distinguish between extended well testing and genuine commercial production. Additionally, the government is contesting the lower court’s ruling that deemed the April 2020 revocation of Eurafric’s license unlawful. They assert that the court improperly relied on the provisions of the Petroleum Industry Act 2021 (PIA) when addressing issues predating the Act’s implementation.
According to the government, the cancellation was anchored in the Petroleum Act, which grants the Minister of Petroleum Resources the authority to revoke a license if the operator does not meet specified obligations. In light of these arguments, the appellants are urging the Court of Appeal to suspend the trial court’s judgment and to affirm the legality of the license revocation.
