Quicktake: NNPC ends 24-year old production contract with Addax Petroleum
The Nigerian National Petroleum Company (NNPC) Limited said it has ended its production sharing contract (PSC) relationship with China-based Addax Petroleum.
The NNPC made the announcement via its official Twitter account on Tuesday, January 31.
NNPC Group Chief Executive Officer, Mele Kyari, and the outgoing Managing Director of Addax Petroleum, Yonghong Chen, signed the closing documents on behalf of the two parties. Part of the announcement said:
- “After fulfilling closing obligations, NNPC and Addax Petroleum Development (Nigeria) Ltd today amicably terminated their 24-Year Production Sharing Contract (PSC) relationship.
- “GCEO, NNPC, Mallam Mele Kyari, and Mr Yonghong Chen (Outgoing MD Addax) signed the closing documents at the NNPC Towers on behalf of the two parties, to symbolize the amicable termination of the relationship.”
The backstory: In November 2022, Nairametrics reported that China-owned Addax Petroleum has officially exited oil mining licenses (OMLs) 123,124 and OMLs 126, 137.
At the time, Nigeria National Petroleum Company (NNPC) Limited signed a Memorandum of Understanding with Addax Petroleum on Tuesday, November 1st, on the transfer, settlement, and exit agreement for the OMLs. Following the deal, Addax ceased to be the production-sharing contractor of the assets.
In case you missed it: In April 2021, President Buhari approved the restoration of the leases on OMLs 123, 124, 126, and 137 to NNPC Limited.
This followed an earlier development in March 2021, when the defunct Department of Petroleum Resources (DPR) revoked Addax Petroleum Exploration Nigeria Limited’s license to operate the four oil assets.
The President then directed the Department of Petroleum Resources (DPR) to retract the letter of revocation and directed NNPC Limited to utilize all contractual provisions to resolve issues in line with extant provisions of the Production Sharing Contract (PSC) arrangement between NNPC and Addax.