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Panel denies role in Addax oil licences revocation

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Backs DPR’s move against the firm

Addax Petroleum

Chairman of the Committee on Compensatory Contracts and other Incentives, Magnus Abe, has dismissed reports that the committee arm-twisted the Federal Government to revoke oil blocks belonging to Addax Petroleum through the Department of Petroleum Resources (DPR).

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According to Abe, issues of revocation, allocation, and management of oil blocks are the exclusive preserve of the DPR.

The DPR had revoked Oil Mining Licences 123, 124, 126, and 137 belonging to Addax Petroleum, citing non-development of the assets for several years, before the revocation was reversed by President Muhammadu Buhari, who is also the Minister for Petroleum Resources.

It would be recalled that the Federal Government had expressed worry about moribund oil and gas projects in the country, reiterating plans to reactivate the dormant facilities.

Abe, during a visit of members of the committee to one of such facilities belonging to Kaztec Engineering Limited Fabrication Yard in Ilase Village, Snake Island, Amuwo-Odofin Local Government Area of Lagos State, observed that the services firm, which has not been operational since 2015 due to contractual issues, has critical equipment and investment worth $600 million wasting away.

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Fabrication at the facility was designed to make it the first wholly indigenous EPIC (Engineering, Procurement, Fabrication, and Offshore Installation, full Turnkey) company that will deliver complex offshore and onshore oil and gas projects, until Addax Petroleum, which is the operator of the oil blocks, declared a force majeure on its operations.

Abe said: “In the light of the abandonment of the oil blocks, lack of investment in the field, colossal losses to the Nigerian economy by the actions of Addax, DPR was right to recommend revocation of the mining leases issued to Addax in the national interest. Those who have contrary interest can pursue them without destroying our nation’s economy.”

Abe said he recently headed a presidential inter-ministerial panel to advise Mr. President on the plight of Kaztec.

“There is nothing in the committee’s assignment that involved allocation of oil blocks. Nigerians need to know that Kaztec, a local firm, was awarded contracts worth over $650million by Addax Petroleum to develop the oil fields operated by Addax.

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“In 2015, Federal Government under President Buhari, in keeping with its anti-corruption agenda, accused Addax of tax atrocities which resulted in the loss of revenue to government. Addax was asked to pay, instead of paying Addax declared a force majeure on its exploration activities and cancelled its investments in the oil fields.

“Kaztec that has invested $650million in the project with Addax, was forced to bear the brunt of the dispute which was actually between Addax Petroleum and the Federal Government.

“Over 3,000 workers were laid off, equipment, vessels, and a fabrication yard worth billions of naira borrowed from Nigerian banks were laid waste. Nigerians must look beyond the needless sensationalism and ask the hard questions that need to be answered.

“The committee report focused exclusively on measures and reliefs which the government can legally extend to Kartec to salvage the heart-breaking and tragic losses to the indigenous company. Nigeria should not be held hostage by any foreign company,” Abe said.

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