On November 1st, Addax Petroleum Development Nigeria Ltd signed a Transfer, Settlement and Exit Agreement (TSEA) with NNPC Ltd for offshore blocks OML 123, OML 124, OML 126, and OML 137.
The subsidiary of the Sinopec Group has now ceased to be the production sharing contractor on these assets, after two decades operating in Nigeria.
Much sought-after assets
The operator had already been criticized for its lack of investment on the blocks, leading to the revocation of its licenses in March 2021 and their award to the consortium of Kaztec Engineering and Salvic Petroleum. However, an intervention by President Buhari had seen the blocks quickly returned to Addax Petroleum a month later.
Throughout the rest of 2021, rumours circulated that another Nigerian consortium involving Mars E&P, a subsidiary of the AA&R Group, along with Kaztec Engineering and Salvic Petroleum was in the race to acquire Addax Petroleum’s interest in the four OMLs. AA&R notably announced in November 2021 a $274m senior secured reserve-based lending facility from the Afreximbank to support the acquisition. However, the deal eventually fell through and did not complete.
Addax’ blocks were originally awarded on a sole risk basis (100% interest) and are considered very attractive by the industry. Two of them are currently producing: OML 123 has been on production since 2006 via the Yinson-operated Adoon FPSO that develops the Antan Field, and OML 126 since 2005 via the BW Offshore-operated Sendje Berge FPSO that develops the Okwori and Nda Fields.
The Adoon FPSO pumped an average of 16,400 barrels of oil per day (bopd) from January to September this year, according to NUPRC data. Its charter period expires at the end of 2022.
Meanwhile, the FPSO Sendje Berge’s average output stood at under 4,500 bopd over the past few months and the vessel lease and operation contract was extended by another year until Q4 2022.
On the other side, OML 137 remains undeveloped but is believed to be the most attractive asset because it holds significant gas resources that could be monetised domestically or via exports.