The Nigerian National Petroleum Company (NNPC) Limited, on Tuesday announced the takeover of the assets of Addax Petroleum, thereby ending a 25 year old Production Sharing Contract (PSC) with the Chinese firm.
The NNPC Group Chief Executive Officer, Mele Kyari, and the outgoing Managing Director of Addax Petroleum, Yonghong Chen, signed on behalf of their respective companies, which took place at the NNPC headquarters in Abuja.
First, NNPC tweeted on its official Twitter page on Tuesday, “BREAKING: @nnpclimited Takes Over #Addax Petroleum’s PSC Assets.
“After fulfilling closing obligations, NNPC Limited and Addax Petroleum Development (Nigeria) Limited today amicably terminated their 24-Year Production Sharing Contract (PSC) relationship.”
The contract termination comes barely three months after NNPC signed a a memorandum of understanding (MoU) on the transfer, settlement, and exit agreement (TSEA) with Sinopec’s Addax Petroleum Development (Nigeria) to exit its four major oil mining leases (OMLs) in the country.
The oil blocks include OMLs 123/124 and 126/137, whose licences were revoked in April 2021, by the defunct Department of Petroleum Resources (DPR).
The licences were however restored three weeks later by President Muhammadu Buhari.
After fulfilling closing obligations, NNPC Limited and Addax Petroleum Development (Nigeria) Limited today amicably terminated their 24-Year Production Sharing Contract (PSC) relationship.
Later in a statement, NNPC said it has taken necessary steps to take over the assets and oversee a clean, amicable, and speedy exit for Addax Petroleum Ltd.
It added that it plans to operate the asset on an interim basis as a first step and subsequently appoint a competent replacement PSC contractor while NNPC Limited continues to remain the concessionaire of the assets in line with extant laws and regulations.
The statement reads: “Exit negotiations and formalities have been concluded and NNPC Ltd. in collaboration with the Office of the Attorney-General of the Federation, NUPRC, NMDPRA, FIRS, EFCC, and the FCCPC have agreed on the clean and amicable exit for Addax by resolving all the PSC contractual issues, including litigations that culminated in the execution of a transfer, settlement, and exit agreement (TSEA) on the 1st of November 2022.
“With the fulfillment of the closing obligations by the parties and effective from January 31, 2023, Addax transfers the operatorship of OMLs 123/124 and 126/137 to Antan Producing Limited on interim basis through the transition period pending the emplacement of a substantive replacement PSC in compliance with the directive of Mr President.
“As the Addax Assets return to NNPC Limited, it is expected that the much-needed investments will be deployed to the Assets while prudently conducting petroleum activities and creating value for the PSC, government, and other stakeholders.”
NNPCL also announced the appointment of the transition team lead, Sagiru Jajere, as the Managing Director of Antan Producing Limited.
Mr Jajere was previously the Head of PSC Investment Management at the NNPCL Upstream Investment Management Services (NUIMS).
He will be supported by a team of highly competent personnel with in-depth knowledge of the peculiarities of the Addax Assets, the oil firm said.