Addax Petroleum, a leading Chinese company operating in Nigeria’s hydrocarbon resources upstream sector, has exited oil mining licenses (OMLs) 123,124 and OMLs 126, 137.
The company’s exit of the oil blocks is coming nearly 18 months after government ordered the takeover by the Nigeria National Petroleum Corporation (NNPC), now Nigeria National Petroleum Company Limited (NNPCL)
The Chief Upstream Investment Officer at the NNPC Upstream Investment Management Services (NUIMS), Bala Wunti, gave this hint through a statement on his Twitter account.
He stated that Nigerian National Petroleum Company (NNPC) Limited signed a Memorandum of Understanding (MoU) with Addax Petroleum on Tuesday for the transfer, settlement and exit agreement for the OMLs.
According to him, with the agreement Addax has ceased to be the production sharing contractor of the asset.”
It would be recalled that President Muhammadu Buhari had in April last year approved the restoration of the leases on OMLs 123, 124, 126, and 137 to NNPC Limited following the revocation of the Addax Petroleum’s licences on the four oil blocks in March by the Department of Petroleum Resources (DPR).
Buhari ordered the DPR to retract the letter of revocation and directed NNPC Limited to use all contractual provisions to resolve issues in line with extant provisions of the Production Sharing Contract (PSC) arrangement between NNPC and Addax.
According to information on the circumstances leading to the revocation of Addax Petroleum Company Limited’s licences, the presidency is convinced that the restoration of the blocks to NNPC Limited would leverage the company’s portfolio, thereby enabling the state-owned oil company to increase its crude oil production capacity and increase its revenue generation capacity.
The company’s licences were earlier revoked due to its inability to develop the oil blocks and failure to comply with the work programme targets.
Before the revocation of the licences, the NNPC Limited had formally lodged a complaint at the Presidency that the company had not been investing in capital projects, development drilling, and exploration activities due to a dispute on applicable fiscal terms on its blocks.
