President Muhammadu Buhari, on Friday approved the restoration of the leases on Oil Mining Licences (OMLs) 123, 124, 126 and 137 to the Nigeria National Petroleum Corporation (NNPC).
However, the directive by the president includes a production sharing contract with Addax Petroleum.
Before now, Addax Petroleum, owned by Government of the People’s Republic of China, had been awarded operational licences of the OMLs 123, 124, 126 and 137.
The four licences held by Addax Petroleum were revoked on March 30, by the Department of the Petroleum Resources (DPR).
The Director of DPR, Mr. Sarki Auwalu, in a post on its official website, had said the licences were revoked because Addax was not developing the assets sufficiently.
Auwalu stated that DPR has the authority to revoke licences when the holder is not meeting its agreement stated in the contract
According to him, over 50% of the oil blocks’ assets were underdeveloped, adding that it has cost the government lost revenue.
Meawhile, the Senior Special Assistant to the President on Media and Publicity, Mr Garba Shehu, in a statement released on Friday, disclosed that the President has ordered the DPR to retract the letter of revocation of the leases.
According to the statement, the president has directed NNPC to utilize contractual provisions to resolve issues in line with the extant provisions of the Production Sharing Contract arrangement between NNPC and Addax.
Shehu also said that the restoration of the OMLs was in line with the current administration’s commitment to the rule of law, fairness and enabling a stable business climate for investment.
“This development reaffirms the commitment of the Buhari administration to the rule of law and sanctity of contracts.
“The restoration of the blocks to NNPC will boost the organisation’s portfolio, thereby making the corporation to, in the long run, boost its crude oil production and in turn increase the revenue it generates to the Federation Account,” Shehu added.
