By Obas Esiedesa, Abuja
The Federal Government has revoked oil mining licences awarded to Chinese firm, Addax Petroleum, for the second time in less than 12 months.
Oil Mining Licences (OMLs) 123, 124, 126 and 137 to granted to Addax were initially revoked in March by the defunct Department of Petroleum Resources (DPR) but was restored on orders of President Muhammadu Buhari following the intervention of the Nigerian National Petroleum Corporation (NNPC).
But in a note on Thursday, the Chief Executive Officer of the Nigerian Upstream Petroleum Regulatory Commission, Engr. Gbenga Komolafe disclosed that Addax Petroleum was unable to meet its obligation in line with guidelines governing the process.
According to him, the assets have reverted to NNPC’s ownership because the award to Addax Petroleum has lapsed.
Komolafe explained that the awardees have not been able to meet their obligations in line with the provisions of the award, noting that the breach meant the annulment of the process.
He stated: “The status of the Addax Petroleum award is that right now the awardees have not been able to meet their obligations in line with the provisions of the award.
“And by the operations of the law, the award stand elapsed and it’s automatically reversed to the NNPC, that is the status as for now”.
Recall that the DPR had in March 2021 explained that the licences were revoked due to the non-development of the assets by the oil firm, leading to the company’s inability to comply with the work programme targets.
According to then Director of DPR, Sarki Auwalu, the licences were cancelled when it was discovered that over 50 per cent of the assets had remained underdeveloped, resulting in loss of the badly-needed revenue to the Federal Government.
DPR also disclosed then that the OMLs had been rewarded to Kaztec Engineering Limited/Salvic Petroleum Consortium.
Its decisions were however overruled by President Buhari who ordered the DPR and the Ministry of Petroleum Resources to restore the licences to Addax which was in production sharing contract with the NNPC.
The President through a statement by the Senior Special Assistant on Media and Publicity, Garba Shehu, explained that the restoration was in line with the administration’s commitment to the rule of law, fairness and enabling a stable business climate for investment.
His directive was based on the strength of a letter written to him by the NNPC on April 20, 2021, arguing that the revocation of the oilfields would have implications on the Nigerian economy and the diplomatic relationship between Nigeria and China.
The NNPC had warned that the revocation, if unresolved, will create an unprecedented level of contingent liability of well over $1 billion for the Corporation as the party in contract with Addax as well as reputational damage to the country.