NNPCL “finally” terminates Addax Petroleum’s PSC, takes over OML 123, 124, 126, 137
The Nigerian National Petroleum Corporation (NNPCL) and Addax Petroleum Development (Nigeria) Ltd, have amicably terminated their 24-Year Production Sharing Contract (PSC) relationship, after fulfilling closing obligations on the controversial assets.
Mallam Mele Kyari, Group Chief Executive Officer (GCEO), NNPCL, and Mr. Yonghong Chen, outgoing Managing Director Addax, signed the closing documents at the NNPC Towers, in Abuja, on behalf of the two parties on Tuesday, to symbolise the amicable termination of the relationship.
EnergyDay gathered that Addax, owned by China’s Sinopec Group, was the former operator of the four Oil Mining Licences, OML 123, 124, 126, and 137 assets in a Production Sharing Contract (PSC) with NNPCL.
Addax had been enmeshed in crisis, the Federal Government through the defunct Department of Petroleum Resources (now Nigerian Midstream and Downstream Petroleum Resources Authority) in March 2021, revoked its licenses.
The regulatory agency, during the crisis over the assets, claimed that the licences were revoked due to the refusal of Addax Petroleum to fully develop the affected assets and that this action had robbed the government of revenue that could have been generated from assets.
Gbenga Komolafe, Chief Executive Officer, Nigeria Upstream Petroleum Regulatory Commission, NUPRC who also confirmed the revocation disclosed that Addax refused to renew its licences and therefore those licences stand revoked.
He claimed that the average reserve profile of the assets showed that oil reserves had remained essentially flat, as Addax never made efforts to grow the reserves.
The CCEO further revealed that crude oil in all three producing assets had been declining over the years due to inadequate investment by the company.
According to him, the entire OML 137 held about five trillion cubic meters in two key reserves, but the company failed to develop this asset in line with the government’s gas revolution policy, describing this as economic sabotage.