FG revokes Addax Petroleum licences, re awards it to Emeka Offor’s Kaztec Engineering, one other

FG revokes Addax Petroleum licences, re awards it to Emeka Offor’s Kaztec Engineering, one other

Nigeria’s oil and gas regulator, Department of Petroleum Resources, DPR has revoked four licenses held by Addax Petroleum, a highly unusual move for l

US increases cost of visa, blames FG for increment
Air Peace chairman, Allen Onyema lauds Tinubu on transformation of aviation industry
Reps direct CBN to halt implementation of cybercrime levy

Nigeria’s oil and gas regulator, Department of Petroleum Resources, DPR has revoked four licenses held by Addax Petroleum, a highly unusual move for licenses with producing assets.

The head of the agency, Sarki Auwalu said in a post on the DPR website that Addax was not developing the assets sufficiently, adding that the licenses had already been re-awarded to the operator’s former contractor, Kaztec Engineering Limited and Salvic Petroleum Resources Limited.

Kaztec Engineering is owned by businessman, Emeka Offor via his Chrome Group of Companies while Salvic Petroleum Resources Limited is owned by Oye Hassan Odukale of Leadway Assurance PLC.

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 licenses when the holder is not meeting its agreement to invest in and develop them, but moves last year to revoke 11 marginal oilfield licenses resulted in at least two court challenges. DPR is also typically required to prove that the company is not developing the assets as agreed.

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.

Addax awarded work to Kaztec over the years, including on OML 123. The operator got into trouble over some of its awards to Kaztec. A 2016 report from Deloitte raised concerns over more than $80mn paid by Addax to the engineering company.

Addax declared force majeure on its contracts with Kaztec in 2015. Kaztec is developing a fabrication yard at Snake Island, in Lagos State. This work was thrown into jeopardy following Addax’s move.

China’s state-owned Sinopec acquired Addax in 2009. The loss of the four licences would leave the oil company with just one stake in the Okwok marginal field.

Addax was supposed to supply gas to a planned gas processing plant, which is at the heart of a legal scandal involving P&ID and the state of Nigeria. OML 123 was to provide gas. According to legal filings, Addax was initially interested in supplying gas but withdrew its support in June 2012.