Addax Petroleum: Nigeria, China Agree To Strengthen Bilateral Relations

The Federal Government and the government of China have agreed to deepen the bilateral relationship between both countries.

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Both countries also agreed that the revocation of some Oil Mining Licenses held by Addax (a Chinese owned company) will not have any impact on the excellent relationship between the two countries.

The assurance is the highpoint of a meeting between the Chinese Ambassador to Nigeria CUI Jianchun and Timipre Sylva, the Minister of State for Petroleum Resources for Nigeria.

The meeting was held on Thursday at the Minister’s office at the Nigerian National Petroluem Corporation Towers, Abuja.

A statement by the Media Adviser to the Minister, Garba Deen Mohammed, explained that the two top officials agreed on excellent relations that exist between their two countries and expressed the need to deepen this partnership

The statement said, “The Chinese Ambassador to Nigeria H.E CUI Jianchun and H.E. Timipre Sylva, the Honourable Minister of State for Petroleum Resources for Nigeria, met today in the Minister’s office at the NNPC Towers, Abuja.

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“The two top officials agreed on excellent relations that exist between their two countries and expressed the need to deepen this partnership.

“Among other issues, they both agreed that the recent revocation of some OMLs held by Addax (a Chinese owned company) was purely a commercial decision and will not have any impact on the excellent relationship between the two countries.”

The Department of Petroluem Resources, had on April 7 revoked the four Oil Mining Licences belonging to Addax Petroleum.

The Director/Chief Executive Officer, DPR, Mr. Sarki Auwalu, had told journalists in Lagos that it was discovered that over 50 per cent of the assets had remained underdeveloped.

He said the non-development of the assets had led to the loss of revenue by the Federal Government

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But few days after the revocation by the DPR, President Muhammadu Buhari reversed the revocation and gave approval for the restoration of the leases on the four Oil Mining Licences to the Nigerian National Petroleum Corporation.

The oil licences affected are OMLs 123, 124, 126 and 137.

The President had also directed the DPR to retract the letter of revocation of the leases.

He also directed the NNPC to utilise the contractual provisions to resolve issues in line with the extant provisions of the Production Sharing Contract arrangement between NNPC and Addax.

THE WHISTLER had reported that the revocation action if it was left to stand would have resulted in several legal implications to the NNPC and the Federal Government.

For instance, the ability of NNPC and the newly appointed Contractor Parties to properly utilize the assets may be severely hampered if Addax goes ahead with its threat to legally challenge the revocation process as regards compliance with Paragraphs 26, 27, 28, 29 and 30 of the First schedule of the Petroleum Act.

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This Website had also reported that even if Addax does not contest the legality of the revocation process, they may still have grounds to make claims in respect of cost recovery of outstanding expenditure or consequential losses such as profit against NNPC and thus indirectly the Government.

Had the President not intervened, the revocation would have affected the diplomatic relationship between Nigeria and China.

This is because China which is the parent Country of Addax is the largest trading partner of Nigeria, representing over 20 per cent of international trade and almost three times the next largest trading partner.

In addition, China had also provided financing for key infrastructural projects like the railways, Abuja -Kaduna -Kano Pipeline amongst others.

The revocation action could also threaten the realisation of these critical projects

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