Home Business Panel says Addax Petroleum caused Nigeria ‘economic waste’, submits report to Buhari

Panel says Addax Petroleum caused Nigeria ‘economic waste’, submits report to Buhari

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Panel says Addax Petroleum caused Nigeria 'economic waste', submits report to Buhari

A committee set up by President Muhammadu Buhari to investigate a “breach” of agreement by Addax Petroleum, has accused the company of causing the country a huge economic loss.

The committee headed by a former senator, Magnus Abe, said this Wednesday while submitting its report to Mr Buhari, through the Minister for State for Petroleum Resources, Timipre Sylva, in Abuja.

Addax Petroleum is owned by Sinopec International Petroleum Exploration and Production Corporation (SIPC), which is managed and operated by the Sinopec Group. SIPC is specialised in overseas oil and gas investment and operations and manages Sinopec’s international exploration and production portfolio, including Addax Petroleum.

The Nigerian government revoked four Oil Mining Leases, OMLs, belonging to Addax Petroleum Nigeria Limited citing the inability of the firm to comply with agreed terms.

The revocation and re-award were approved by Mr Buhari. The OML will now be operated by Kaztec Engineering Limited/Salvic Petroleum Resources Limited (KEL/Salvic) Consortium, the Director Department of Petroleum Resources, Sarki Auwalu, said.

Nigerian lawmakers had also set up a seven-man ad hoc committee to investigate another N1.2 trillion reported oil revenue loss to the federal government owing to a breach by SINOPEC ADDAX Petroleum.

Economic Waste

Mr Abe said on Wednesday that the committee, set up on August 14, 2020, had submitted an interim report but requested more time to enlighten Nigerians.

“It is important that Nigerians should understand the extent of what happened on this project. First of all, this was a project that was to extract over 19 million barrels to our existing reserves which could have been part of the daily national production of this country after that project was awarded and everything was in place,” he said.

“Over one billion dollars have been invested in this. Addax Petroleum called off the project over an issue that was totally unrelated to this project. That action put over 3000 Nigerians out of work. It wasted millions of dollars of the hard-earned currency that this country earned.

“We have carefully analysed all these and we felt that the public should be aware of the extent of damage that was done to waste indigenous resources, the economic waste, not only were the workers affected but other projects.

“With that spirit that Mr President set up this committee from different ministries to make clear recommendations to him, today we are just here to do a formal presentation.

“Addax invested over $650 million but they had issues with the government they could no longer go on with the project, workers were laid off, ships were abandoned and the investment was wasted. When the president heard of it, he set up this committee,” he said.

Mr Abe did not disclose the content of the report, but insisted the report was for Mr Buhari to evaluate.

While receiving the report, Mr Sylva said the recommendations would be considered to get justice for the investors as well as Nigerians.

“You have done a great job and I am going to hold your recommendations, give to Mr Buhari to get justice for the petroleum industry,” he said.

Calls to Addax Petroleum‘s official telephone numbers Wednesday did not go through.

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