Nigeria’s oil and gas regulator has revoked four licenses held by Addax Petroleum, it said in a statement on April 7, a highly unusual move for licenses with producing assets.
Department of Petroleum Resources director Sarki Auwalu said in a post on the DPR website that Addaxwas not developing the assets sufficiently.
A DPR spokesman said the licenses had already been re-awarded to Kaztec Engineering Ltd. and Salvic Petroleum Resources Ltd.
Two Addax representatives in Nigeria did not immediately respond to messages on LinkedIn seeking comment.
Addax is owned by China’s Sinopec Group. Of the four revoked assets, OML 123, OML 124, OML 126 and OML 137, three have producing fields, Addax’s website says.
Addax said it had 11 fields with 80 production wells in OML 123, two fields with 15 producing wells in OML 124 and two fields with 17 production wells in concession OML 126.
DPR has the authority to revoke licenses when the holder is not meeting its agreement to invest in and develop them, but moves last year to revoke 11 marginal oilfield licenses resulted in at least two court challenges. DPR is also typically required to prove that the company is not developing the assets as agreed.
Auwalu, who visited Addax as recently as September 2020, said over 50% of the assets were underdeveloped, which he said cost the government lost revenue.
Gas from Addax was also expected to feed an ill-fated P&ID gas processing plant. P&ID is fighting to enforce an arbitration award against the Nigerian government worth nearly $10 billion over the collapse of the deal, and it never built the gas plant.
The deal would create the largest pure-play northern Midland Basin E&P with a 73,000-net-acre position and 12,000 boe/d of production that is expected to more than double through 2020.
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