The commercial disagreements over the company’s assets were effectively resolved when the Nigerian National Petroleum Company Ltd. and Addax Petroleum Company signed an Asset Transfer Agreement on Tuesday.
The NNPC Board Chairman, Mrs Margary Okadigbo, the Group Chief Executive Officer, Mallam Mele Kyari attended the agreement signing virtually while the Executive Vice President, Upstream, NNPC Limited Mr. Adokiye Tombomieye; the Chief Upstream Investment Officer of the NNPC Upstream Investment Management Services, Mr Bala Wunti; the Chief Finance Officer of NNPC, Umar Ajiya; the Executive Commissioner, Development and Production, Nigerian Upstream Petroleum Regulatory Commission, Dr Habib Nuhu; and the Managing Director, Addax Petroleum, Mr Yonghong Chen attended the event physically.
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The agreement was signed by the Chief Financial Officer of NNPC Ltd. and the MD of Addax on behalf of their respective organizations.
A significant diplomatic, governmental, and legal controversy has been peacefully ended with the signing of the agreement.
The exit deal is anticipated to strengthen Nigeria’s and China’s diplomatic and commercial ties.
The four oil mining licenses held by Addax Petroleum were cancelled on April 7 of last year by the Department of Petroleum Resources, which is now NUPRC.
Over 50% of the assets had remained underdeveloped, according to Mr. Sarki Auwalu, who was the DPR’s Director/Chief Executive Officer at the time.
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He claimed that the Federal Government had lost money as a result of the assets’ non-development.
But shortly after the DPR’s cancellation, President Muhammadu Buhari overturned it and granted permission for the Nigerian National Petroleum Company Ltd. to re-establish the leases on the four oil mining licenses.
The OMLs 123, 124, 126, and 137 oil licenses are impacted.
The President also gave the then-DPR instructions to withdraw the letter revoking the licenses.
In accordance with the current terms of the Production Sharing Contract agreement between NNPC and Addax, he had also instructed the NNPC to use the contractual procedures to address disputes.
According to reports, if the revocation action had been allowed to stand, the NNPC and the Federal Government would have faced a number of legal repercussions.
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Kyari said the transaction would increase the production of crude oil from the assets for the benefit of Nigeria during the agreement signing on Tuesday in Abuja.
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