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Nigeria's oil regulator revokes four Addax field licences

Published 07/04/2021, 18:04
Updated 07/04/2021, 18:06
© Reuters.

By Libby George
LAGOS, April 7 (Reuters) - Nigeria's oil and gas regulator
has revoked four licences held by Addax Petroleum, it said in a
statement on Wednesday, a highly unusual move for licences with
producing assets.
Department of Petroleum Resources director Sarki Auwalu said
in a post on the DPR website that Addax was not developing the
assets sufficiently.
A DPR spokesman said the licences had already been
re-awarded to Kaztec Engineering Limited and Salvic Petroleum
Resources Limited.
Two Addax representatives in Nigeria did not immediately
respond to messages on LinkedIn seeking comment.
Addax is owned by China's Sinopec Group. Of the four revoked
assets, OML 123, OML 124, OML 126 and OML 137, three have
producing fields, Addax's website says.
Addax said it had 11 fields with 80 production wells in OML
123, two fields with 15 producing wells in OML 124 and two
fields with 17 production wells in concession OML 126.
DPR has the authority to revoke licences when the holder is
not meeting its agreement to invest in and develop them, but
moves last year to revoke 11 marginal oilfield licences resulted
in at least two court challenges. DPR is also typically required
to prove that the company is not developing the assets as
agreed. [https://reut.rs/39QVEG8]
Auwalu, who visited Addax as recently as September last
year, said over 50% of the assets were underdeveloped, which he
said said cost the government lost revenue.
Gas from Addax was also expected to feed an ill-fated P&ID
gas processing plant. P&ID is fighting to enforce an arbitration
award against the Nigerian government worth nearly $10 billion
over the collapse of the deal, and it never built the gas plant.

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