The Nigerian National Petroleum Company Limited and Addax Petroleum Company signed an asset transfer agreement on Tuesday to bring an end to the dispute surrounding Oil Mining Leases 123/124 and 126/137.
NNPC’s Chief Finance Officer, Umar Ajiya, signed the agreement on behalf of his company, while the Managing Director for Addax, Yonghong Chen, signed for the oil firm.
With the agreement, the protracted dispute on OMLs 123/124, 126/137, operated by Addax Petroleum Nigeria Limited, has finally been laid to rest.
The Production Sharing Contract for the blocks was initially signed in 1973 between NNPC and Ashland, but was terminated after 25 years.
The NNPC then signed another PSC with Addax in 1998 on the blocks and operated through Addax Petroleum for another 24yrs.
The Addax PSCs were associated with complexities and attendant disputes, as the assets suffered lack of investment due multiple historical litigations.
Last year, issues around the revocation of the licences were reconsidered and the upstream industry regulator advised that the asset be returned to the concessionaires to ensure a clean and amicable exit for Addax.
The NNPC commenced formal engagements with Addax and the Nigerian Upstream Regulatory Commission on the issue in January this year. This culminated in the preparation and signing of a Transfer, Settlement and Exit Agreement.
Speaking during the agreement signing in Abuja on Tuesday, The Group Chief Executive Officer, NNPC, Mele Kyari, who attended virtually, said the deal would boost the production of crude oil from the assets.