China-owned Addax Petroleum has officially exited oil mining licenses (OMLs) 123,124 and OMLs 126, 137.
This was disclosed by Bala Wunti, the Chief Upstream Investment Officer at the NNPC Upstream Investment Management Services (NUIMS), through a statement on his Twitter account.
Wunti further disclosed that Nigeria National Petroleum Company (NNPC) Limited signed a Memorandum of Understanding with Addax Petroleum on Tuesday, November 1st, on the transfer, settlement and exit agreement for the OMLs. He explained that “with this agreement, Addax has ceased to be the production sharing contractor of the asset.”
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This followed an earlier development in March 2021, when the Department of Petroleum Resources (DPR) revoked Addax Petroleum Exploration Nigeria Limited’s licence to operate the four oil assets.
The President directed the Department of Petroleum Resources (DPR) to retract the letter of revocation and directed NNPC Limited to utilize all contractual provisions to resolve issues in line with extant provisions of the Production Sharing Contract (PSC) arrangement between NNPC and Addax.
At the time, the presidency had hoped that the restoration of the blocks to NNPC Limited will boost the organization’s portfolio, thereby enabling the state-owned oil company to boost its crude oil production and increase the revenue it generates for the federation account.
The company’s licenses were earlier revoked due to its inability to develop the assets, leading to the company’s inability to comply with the work programme targets. NNPC Limited told President Buhari that Addax Petroleum had not been investing in capital projects, development drilling, and exploration activities due to a dispute on applicable fiscal terms on its blocks.