FG to earn $340m from new operator of Addax OML

The Federal Government is expected to earn a sum of $340 million from the new operator of the Addax OML License, The committee led by a former senator, Magnus Abe, said $1 billion had been invested in the contract but Addax Petroleum called it off over an issue that was totally unrelated to the project. The action put over 3,000 Nigerians out of work, the committee said.

It may be recalled that the Directorate of Petroleum Resources (DPR) had recently revoked the four assets of Addax Petroleum Exploration Nigeria Ltd., namely OMLs 123, 124, 126 and 137, due to the non-development of the assets by the company. Following this decision, a committee set up by President Muhammadu Buhari to investigate Addax breach of contract submitted a report, accusing the petroleum company of “economic waste.”

The Magnus Abe-led committee, set up by Buhari to look into the matter, disclosed that the actions of Addax/Sinopec put over 3,000 Nigerians out of job.

The choice of consortium, The Nation learnt, is also in accordance with the Nigerian Oil and Gas Industry Content Development (Local Content) Act, which was enacted in 2020 to promote indigenous operation of Nigeria’s oil and gas assets.  Under the Act, seasoned Nigerian independent operators are to be given first consideration in the award of oil blocks and oil field licenses.

Already, as part of the assignment of the assets, the new consortium has committed to pay $340 million at the commencement of the Production Sharing Contract (PSC) to the federal government, a much needed sum in these hard times of tough government finance.

It will also redevelop the significant oil resources which have been lying fallow, and ramp up production, as well as the large gas resources within 24 months, both for the domestic market and for export, in line with the government’s aspirations for the gas industry.

Meanwhile, the National President, Good Governance Advocates, Kema Maxwell, said that in choosing a new operating consortium to manage the OMLs, DPR carefully opted for an operator that is familiar with the revoked assets, and saving the country a huge economic loss.