Business

Addax Petroleum terminates 24-year contract, NNPC takes over four oil blocs

Published

1 year ago

January 31, 2023

Addax Petroleum and the Nigerian National Petroleum Company (NNPC) Limited terminated their 24-Year Production Sharing Contract (PSC) on Tuesday.

In a statement released by the NNPC via Twitter, it was disclosed that the Nigerian oil corporation will now take over the assets of Addax Petroleum following the termination.

The assets previously held by Addax, owned by Chinese state-owned firm, Sinopec, include four oilfields; Oil Mining Leases (OMLs) 123, 124, 126 and 137.

Prior to the final termination on Tuesday, both firms had been at loggerheads over the oil blocs, with the confrontation reportedly threatening the relationship between China and Nigeria.

Addax had been in charge of the oilfields since 1998, however, their ownership license was revoked by the defunct Department of Petroleum Resources (DPR) in April 2021.

DPR took the decision on the back of a lack of development of the assets, but President Muhammadu Buhari intervened, and the licenses for the oil blocs were returned.

However, the dispute between Addax and the Nigerian authorities continued, but after a long battle that included a court case, in January 2022, both Addax and NNPC began amicable settlement to transfer the oilfield back to the Nigerian government.

Last year November, both firms signed a Memorandum of Understanding (MoU) on the Transfer, Settlement and Exit Agreement (TSEA).

NNPC, in a series of Tweets on Tuesday, said, “@nnpclimited Takes Over #Addax Petroleum’s PSC Assets.

“After fulfilling closing obligations, @nnpclimited and Addax Petroleum Development (Nigeria) Ltd today amicably terminated their 24-Year Production Sharing Contract (PSC) relationship.

“GCEO @nnpclimited Mallam @MKKyari and Mr. Yonghong Chen (Outgoing MD Addax) signed the closing documents at the #NNPCTowers on behalf of the two parties, to symbolise the amicable termination of the relationship.”

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