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How Oil Output from Addax-operated OMLs Fell from 130,000bpd to 7,000bpd Amid OPEC Deficit



Production from assets operated by Addax Petroleum slumped massively from 130,000 barrels per day to 7,000bpd amid disagreements with the federal government, a new document released by the Nigerian National Petroleum Company Limited (NNPC) has revealed.

The NNPC’s latest quarterly publication of its activities indicated that the Production Sharing Contract (PSC) on Oil Mining Leases (OMLs) 123/124 and 126/137 crumbled after the Chinese-owned Addax declined to make new investments on the assets, leading to a fall of budgetary allocation from over $2 billion to barely $200,000 when the firm was exiting the assets last year.

The NNPC had on January 31, 2023 announced the termination of the 24-year deal with Addax Petroleum Development (Nigeria) Limited, marking the exit of the Sinopec of China’s subsidiary.

The official end to the business relationship came three months after the execution of the Addax Transfer, Settlement, and Exit Agreement (TSEA) for the PSC Oil blocks, OMLs 123/124 & 126/137, with the assets then transferred to the concessionaire, NNPC.

The PSC for the oil blocks was initially signed in 1973 between the NNPC and America’s Ashland, but was terminated after 25 years. Subsequently, the NNPC signed another PSC with the Swiss and then with China’s Sinopec, which retained the name Addax in 1998.

However, the Addax PSCs were associated with significant intricacies and complexities and attendant disputes, even threatening the diplomatic relations between Nigeria and China at a point.

Multiple litigations then ensued, hindering the attainment of the desired objectives of value creation to the PSC parties, government, and other stakeholders.

Now renamed Antan Producing, a Special Purpose Vehicle (SPV), the NNPC in the publication stated that after initially raising production from 7,000 bpd to 15,000bpd, the target this year is to further increase production to 30,000 bpd.

The new Managing Director of the oil asset, Sagiru Jajere, interviewed by the NNPC in-house staff, said that with the support from the parent body, the NNPC, he had begun to gradually sort out the problems with the assets.

“On the day the assets transfer agreement was signed when we took over, production was just above 7,000 bpd. But as of today, we are doing well over 12,000 barrels from OML 123 alone. We are doing another 3,000 barrels from OML 126. That is 15,000 bpd, up from 7,000 bpd, ”he said.

However, Jajere stated that more investment was required on the asset to ensure increased production.

“The only way to increase production in a sustainable manner is to get more investment. That is necessary for this business. We knew why we came down to the weak production status.

“But you can remember that at a time, we were producing well above our OPEC quota. In fact, there were times we were penalised for producing above our quota. Gradually, we saw the figures dropping, ”he added.

He argued that there are fiscal terms, which have made some investors to stay away from investing in the sector.

“Unless we do something to attract investments, all these activities we’re doing to bring up production to meet the OPEC quota will not amount to much. So, we are trying to make the business attractive so that people can come back and invest, ”he stressed.

Jajere disclosed that the NNPC had had to re-enter some wells that were shut for no real reasons, explaining that it was discovered that some wells were shut at the slightest challenge by the former operators.

“We believe that will give us a volume that will most likely take us to somewhere around 25,000 to 30,000 bpd. In the long-term, we are also looking at OML 137, which is also a big reservoir of oil with a lot of gas.

“This is a huge opportunity that we are looking at. By the time we get there, the production from Antan will be somewhere above 50,000bpd, plus the gas we want to develop and commercialise, ”he stated.

According to him, the issues with Addax were withdrawal of financial incentive package and lack of investments in the asset.

“Everything was going down. We saw it from outside. But you have to be in before you can see some things. The day I stepped into the office at Addax, that was when I realized how terribly bad things had gone, ”Jajere stressed.

If Adax was producing up to capacity, a THISDAY calculation showed that it would be adding up to 4 million barrels every month to Nigeria’s Organisation of Petroleum Exporting Countries (OPEC) quota, which at the end of 2023 was still short by over 500,000 bpd.

Head of Business Services, Victoria Iroro, said the problem with Addax was that the fiscal terms that were agreed at the time they acquired the company were not being implemented.

“Therefore, Sinopec-Addax stopped investing in the development of the assets. The government didn’t like that because it was supposed to be continuous investment.

“This was why the government, through NNPC, decided to take over the assets and operate them. That was how Antan Producing Ltd was incorporated as a special purpose vehicle to operate the assets, ”she added.

According to her, Sinopec did well until they started having issues defaulting by not investing, thereby affecting the morale of staff.

“Production went down, sagging from 130,000bpd to 20,000bpd and further down to 7,000bpd. That was how the government stepped in and decided to take it over as Antan Producing Limited, ”she said.

She argued that the takeover of Addax by the NNPC and the renaming to Anton was a good decision, which was helping to restore some confidence in the workers.

“Sometime ago in 2013, I worked in the finance department at the time and I was responsible for budget and planning. We were running a budget of $2billion and above for the operations of the company.

“But right before our eyes, we started seeing everything sliding until it got to $200,000. You can imagine how bad things went, ”she added.

On his part, the Head of Operations of the SPV, Jeremy Nnajiofor, said a security arrangement to ensure the pipelines are protected had been put in place so that production can be moved to the Agip facility nearby in order to avoid further shut down of the wells.

“And there were a lot of legacy and integrity issues. This was like a challenge because the government took over the assets to prove that a Nigerian company can run this business and grow it. So, we reviewed the situation and came up with a couple of things we needed to do at immediately. We identified the low hanging opportunities that we can explore to grow production, ”he added.

According to him the desire is to get back to above 100,000, which the assets had done in the past.

“I think it is a realisable in the mid to long term. But we need a lot of investment to achieve that, ”he stated.

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NASRE Advises FG On Food Crisis, Forex Shortage Amid Calls To Suspend Import Ban





As Nigeria finds itself at a critical crossroads, grappling with simultaneous challenges of a food crisis and a foreign exchange (forex) shortage.


This is even as the nation seeks solutions to mitigate these pressing issues, the debate over whether to open its borders for importation has intensified.


The food crisis gripping Nigeria has raised concerns about food security and access to essential nutrition for millions of citizens.


Adverse weather conditions, supply chain disruptions, and other factors have contributed to dwindling food supplies and soaring prices, placing a significant strain on households and exacerbating the vulnerability of already marginalized communities.


Meanwhile, the forex shortage has hampered Nigeria’s ability to import essential goods and raw materials, further exacerbating supply chain disruptions and exacerbating inflationary pressures.


Industries reliant on imported inputs, including agriculture, manufacturing, and healthcare, have been particularly hard hit, impeding economic growth and development.


In response to these challenges, some stakeholders advocate for opening Nigeria’s borders to facilitate the importation of food and other essential commodities.


Proponents argue that increased importation could help alleviate immediate food shortages, stabilize prices, and provide relief to vulnerable populations facing hunger and malnutrition.


However, others caution against the potential risks of opening borders amid a forex shortage. Critics raise concerns about the impact on domestic production and self-sufficiency, as well as the long-term consequences of relying heavily on imported goods. They emphasize the need to prioritize investments in domestic agriculture and infrastructure to build resilience against future crises.


As Nigeria navigates these complex issues, the government faces the daunting task of balancing short-term relief efforts with long-term strategies for sustainable development and economic resilience.


Proffering suggestion on how the government can address the unending inflationary pressures, Forex shortages, food prices hike and revitalise the nation’s economy, the Nigerian Association of Social and Resourceful Editors (NASRE), has advised the Nigerian government to adopt collaborative efforts involving policymakers, industry stakeholders, civil society organizations, and international partners to identify holistic solutions that address both immediate needs and underlying structural challenges.


On the debate over whether Nigeria should open its borders for importation amid the food crisis and forex shortage, the President of the advocacy group, Mr Femi Oyewale, underscores the urgency of coordinated action and innovative thinking.


According to him, now more than ever, solidarity, cooperation, and forward-thinking policies are needed to ensure the well-being and prosperity of all Nigerians.


“The question of whether Nigerian borders should be opened for food importation in the face of a food crisis is complex and multifaceted. However, there are factors to consider, which basically, Domestic Agricultural Capacity. Because opening borders for food importation could undermine domestic agricultural production by flooding the market with cheaper imported goods.


“However, if domestic production is insufficient to meet demand, importing food may be necessary to avoid shortages,” he said.


On the economic implications of borders opening, the President of NASRE, Oyewale, said: “Importing food can have economic ramifications, both positive and negative. On one hand, it can provide access to a wider variety of foods and potentially lower prices for consumers. On the other hand, it may negatively impact local farmers and exacerbate trade imbalances.”


The resourceful editors, while commenting on Food Security, pointed out that relying heavily on imported food leaves a country vulnerable to supply chain disruptions and price fluctuations in the global market. Therefore, it urged the federal government to develop a robust domestic agricultural sector, which is crucial for long-term food security.


According to Oyewale, the Nigerian government must consider its broader economic and agricultural policies when making decisions about food importation. This includes evaluating subsidies, tariffs, and investment in agricultural infrastructure.


“Importing food often involves long-distance transportation, which contributes to greenhouse gas emissions and environmental degradation. Promoting local production can help reduce the carbon footprint associated with food consumption.


“Food is not just a commodity; it is essential for human well-being. Government policies should prioritize ensuring access to nutritious and culturally appropriate food for all citizens, particularly those most vulnerable to food insecurity,” he added.


The Nigerian Association of Social and Resourceful Editors, NASRE, therefore, noted that the decision to open Nigerian borders for food importation during a food crisis should be approached cautiously, taking into account the country’s domestic agricultural capacity, economic implications, food security goals, environmental concerns, and social welfare considerations.


“A balanced approach that supports both domestic production and responsible trade practices may be necessary to address immediate food shortages while also promoting long-term food security and sustainability,” the Association stated.

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Lagos State Government to prosecute 11 suspects for extortion




The Lagos State Government said 11 suspects arrested at the Ibeju-Lekki junction and Akodo area of the state will be prosecuted to serve as deterrents to others extorting residents and motorists in the state.

The Permanent Secretary, Ministry of Transportation, Olawale Musa, disclosed this while addressing journalists on Wednesday.

He added that the suspects parade themselves as enforcement officers to extort unsuspecting motorists and residents in the state.

Musa said, “Lagos State Government has declared zero tolerance for extortion of unsuspecting residents, especially motorists, by miscreants parading themselves as enforcement officers at the Ibeju-Lekki junction and Akodo area of the state.

“We have announced severally that nobody is allowed to collect money for the local government on the street of Lagos, and the government has set up a team to ensure that anybody that does that is picked up and from that Lekki axis.

“They will be charged to court to explain themselves, and I want to sound a note of warning to others that do the same thing that we will not relent; the government is all out for them.”

He noted that it is unlawful for any local government area within the state to place personnel to conduct such operations on the highways.

“If you have any issues, you call us, and we will come and address them, but when you have people coming on the road on the guise that you want to have revenue at this hard time, collecting money from motorists on the road is not fair, and it is illegal in Lagos State to resist it.

“It is illegal for any local government area in the state to deploy people on the roads as it negates the Lagos State Road Traffic Law, Section 18, 2018, which empowers only the Lagos State Traffic Management Authority to carry out such operations on the roads,” he added.

In March 2023, The PUNCH reported that the Lagos State Government arrested four suspected hoodlums in some parts of the state over extortion.

The suspects were arrested in the Amuwo-Odofin area of the state while attempting to extort motorists.


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N10bn fraud: EFCC to arraign Abdulfattah Ahmed, ex-Kwara Governor Friday




The Economic and Financial Crimes Commission will arraign the immediate-past governor of Kwara State, Abdulfattah Ahmed, for alleged N10bn fraud on Friday, The PUNCH has learnt.

Credible sources in the anti-graft agency said the ex-governor would be dragged before the Federal High Court in Ilorin, the Kwara State capital.

“He is going to be arraigned on Friday at the Federal High Court in Ilorin for diversion of funds, amounting to N10bn,” the source told our correspondent.

The ex-governor has been detained by the EFCC since Monday when he honoured an invitation for interrogation.

His Chief Press Secretary, Alhaji AbdulWahab Oba, confirmed his principal’s visit to the EFCC office on Monday, stating that it was only “procedural and routine”.

“Dr Ahmed’s visit to the EFCC is procedural and routine. He was invited and he honoured them as he’s always done. He’s always ready to respond to any query or question regarding his tenure as a governor of the state.”

On Tuesday night, Oba lamented that the EFCC was still holding on to Ahmed, saying he was given stringent bail conditions.

“Yes, he is still with the EFCC and we are now in a dilemma over the issue because they keep changing the goalpost during the match. The case is taking a new dimension, which we don’t really understand for now.

“Initially they said they wanted him to produce two sureties who are federal directors. The sureties came and were asked to provide landed properties in Abuja. We see this as a contradiction. The case was initially handled by the EFCC office in Abuja before it was transferred to Ilorin over the issue of jurisdiction. Additionally, he has been denied access to his doctors, medication and direct access to his cook,” Oba said.

Meanwhile, members of the opposition Peoples Democratic Party in Kwara State on Wednesday staged a peaceful protest to the EFCC zonal office in Ilorin, where Ahmed was being detained.

The protesters, who carried placards with various inscriptions, expressed displeasure over Ahmed’s detention.

Led by the state Publicity Secretary of the PDP, Olusegun Adewara, the party members alleged that the All Progressives Congress in the state was behind Ahmed’s troubles.

Some of the inscriptions on their placards read: “EFCC should stop being a tool in the hands of Abdulrazaq led-APC”, “Governor Ahmed was very transparent”, “EFCC is not a department in the APC, EFCC, stop the harassment”, “The opposition cannot be silenced”, “Maigida will not join the APC no matter the persecution”, “EFCC, don’t instigate political crisis in Kwara State”, “No to illegal detention. Respect the rule of law”, among others.

But addressing the protesters, the zonal commander of the EFCC, Michael Nzekwe, said Ahmed had been given an administration bail but he could not meet the conditions.

“We’re wrapping up. Once we wrap up, the law will take its course. The anti-graft agency, being a creation of law, would not go contrary to law.

“Everything we’ve done is within the ambit of the law. The former governor is cooperating with us and we’re making good progress following rules of law. As I speak, he’s with his lawyer, a SAN; he attends to everyone who comes to see him, and he has a doctor who has attended to him. He eats what he wants to eat. I urge us to allow the law take its course. We’re not partisan nor prompted by anybody. This body is solely sponsored by the Federal Government,” Nzekwe said.


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