Nigeria’s president has restored four oilfield licenses to Addax Petroleum, a company controlled by China’s Sinopec, overruling a previous revocation from the country’s petroleum regulator.
The entire statement of Nigerian President Muhammadu Buhari was announced via social media channels several days ago.
Namely, the restoration of the fields came roughly three weeks after the Department of Petroleum Resources rescinded them or more precisely on 30 March 2021. According to the statement, returning the licenses to Addax aims to ensure “commitment to the rule of law, fairness and enabling a stable business climate for investment“.
“This development reaffirms the commitment of President Buhari to the rule of law and sanctity of contracts. While directing the Department of Petroleum Resources to retract the letter of revocation of the leases, the President also directed the Nigerian National Petroleum Corporation (NNPC) to utilise contractual provisions to resolve issues in line with the extant provisions of the production sharing contract arrangement between NNPC and Addax”, the statement said.
In the statement, the Nigerian Presidency claimed that this move would also increase Nigeria’s oil production as well as return the fields to the original production sharing contracts status between NNPC and Addax.
According to Reuters, director of the Department of Petroleum Resources Sarki Auwalu said when the licenses were taken from Addax that it was not developing the assets sufficiently.
The entire situation was unusual since the producing fields after the licenses were revoked ended up immediately in the hands of other companies, more precisely, Kaztec Engineering and Salvic Petroleum Resources.
According to Addax’s website, of the four licenses in question – OML 123, OML 124, OML 126, and OML 137 – three have producing fields.