Nigeria’s Oil Production Decline by 22,000bpd

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………As Addax Workers Join Strike

It is believed that Nigeria’s oil production capacity would be heavily affected, to the point of possible 22,000 barrels of oil per day loss, as employees of Addax Petroleum Development Nigeria join other oil workers on strike.

Addax, owned by China’s Sinopec Group, operates four Oil Mining Licences, namely OML 123, 124, 126, and 137, in a Production Sharing Contract (PSC) with the Nigerian National Petroleum Corporation (NNPC) before the latter’s its recent transformation.

Addax has about 324 Nigerian employees, including 141 permanent staff and 183 contract employees. The striking workers, who are members of the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), said Addax refused to engage them on related issues after the announcement of the revocation of its licenses by the federal government.

The workers have threatened to shut all the company’s operations including oil wells, valves crude lifting, and export terminals operated by Addax if the company refuses to engage them.

They stated that all attempts to engage management of the company dialogue have failed hence the strike option. The workers revealed that sequel to the notification by the APN management informing its employees on the withdrawal of operating licenses by the NNPC in a town hall meeting, both parties met and reached a financial term of exit settlement for all the workers.

It was further agreed that the financial exit settlement will be executed at the expiration of Addax Petroleum Nigeria’s PSC agreement for OML 123 and 124 by July 1, 2022.

Addax management was however said to have reneged on that agreement and other employees ‘related issues.

Addax has been enmeshed in revocation of licenses by the then Department of Petroleum Resources (DPR) in March 2021. The regulatory agency claimed that the licenses were revoked due to the refusal of Addax Petroleum to fully develop the affected assets, alleging that this action has robbed the government of that could have been generated from assets.

DPR, now Nigeria Upstream Petroleum Regulatory Commission, claimed that the average reserve profile of the assets showed that oil reserves have remained essentially flat, as Addax never made efforts to grow the reserves.

It stated that the entire OML 137 holds about five trillion cubic metres in two key reserves, but the company failed to develop this asset in line with the government’s gas revolution policy, describing this as “economic sabotage.”

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