…Kaztec Engineering/Salvic Petroleum Resources Consortium takes over
The Federal Government has revoked all four oil Production Sharing Contracts (PSCs) operated by Addax Petroleum Limited over its failure to develop the assets. The affected PSCs included Oil Mining Leases ( (OMLs) 123, 124, 126 and 127 all of which were operated by Addax Petroleum Development Nigeria Limited and Addax Petroleum Exploration Nigeria Limited. The revoked acreages according to the government have potential for over 5 trillion standard cubit feet of gas
The revocation order was conveyed in a letter signed by the Director of Department of Petroleum Resources (DPR) Mr Sarki Auwalu.
Consequently, the government said it has also re-awarded the revoked assets to Kaztec Engineering Limited/Salvic Petroleum Resources Limited also known as KEL/SALVIC Consortium involving two Nigerian independent investors effective March 23, 2021, who are expected to manage the assets better to pay appropriate royalties to the Federal Government.
Government was miffed that more than 50 percent of the acreages awarded to the company has remained undeveloped, thereby constituting a loss of revenue to the Muhammedu Buhari administration that needs such revenue to fund its infrastructure development initiatives.
Other reasons given by the DPR boss for the revocation, includes Addax’s failure to develop the assets and run them in a business -like manner. Auwalu further stated that oil reserves in the acreages had remained flat over the years, an indication that the operator deliberately refused to invest in them, while crude production in all facilities continued to decline.
Addax was also accused flaring a significant amount of gas, while failing to supply same to the domestic market despite the huge demand for feedstock to power electricity supply in the country.
OMLs 123 and 124 are expected to expire in 2022 while OMLs 126 and 137 are expected to expire in 2024 and 2027 respectively according to DPR sources.
Meanwhile, a stakeholders’ meeting of Addax management and KEL/SALVIC consortium is expected to hold today to work out a seamles formal handover of the assets to the new managers.
Addax Petroleum was established in 1994 and had since August 2009 has been a subsidiary of the Sinopec Group, one of the largest oil and gas producers in China, the biggest oil refiner in Asia and the third largest worldwide.
