FG explains why it revoked 4 Addax petroleum oil mining licenses

The Federal Government has stated why it revoked 4 Oil Mining Licenses (OML) belonging to Addax Petroleum Nigeria Limited.

In its clarification, the government explained that the licenses were revoked due to the non-development of the assets by the oil firm, hence their inability to comply with the work programme targets.

This disclosure was made by the Director/Chief Executive Officer of the Department of Petroleum Resources (DPR), Mr Sarki Auwalu while speaking during an interactive session with journalists on some topical issues in the oil and gas industry in Lagos.

While listing the affected assets that include OML 123, 124, 126 and 137, Auwalu said that it was discovered that over 50% of the assets had remained underdeveloped, which he said was resulting in loss of revenue to the federal government.

According to him, “Addax refused to develop the assets and Addax were therefore not operating the assets.”

The DPR boss pointed out that going by the country’s Petroleum Act, “The first reason for a revocation is when you discover that the asset is not being developed according to the business guidelines because it is economic sabotage.”

The DPR boss noted that the revocation and re-awarding of the OML had already been approved by President Muhammadu Buhari, who also doubles as Nigeria’s Minister for Petroleum Resources.

What this means

The revocation of these Oil Mining Licenses is part of the Federal Government’s efforts to maximize the benefits from its oil and gas assets which are underutilized.

This is also coming at a time when the government is working to attract more investment in the nation’s downstream sector of the oil and gas industry.