Page 9 - AfrOil Week 17 2021

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The department rescinded Addax’s licences for
OML 123, OML 124, OML 126 and OML 137 on
April 6. At the time, Sarki Auwalu, DPR’s direc-
tor, said he had taken this decision because the
company was not upholding its commitment to
develop these sites, as spelled out in its agree-
ment with state-run Nigerian National Petro-
leum Corp. (NNPC). “Addax refused to develop
the assets, and Addax [was] therefore not oper-
ating the assets,” he declared.
Nigeria’s existing Petroleum Law provides for
the revocation of licences when investors fail to
move forward with work at their assigned sites,
Auwalu added. Under this law, “the first rea-
son for a revocation is when you discover that
the asset is not being developed according to
the business guidelines, because it is economic
sabotage,” he was quoted as saying in a DPR Three of the four licence areas affected are offshore (Image: Addax Petroleum)
statement.
Despite these reassurances, the department’s time, neither of the Nigerian firms had com-
decision was unusual, as Nigerian authorities mented publicly on the matter.)
rarely take licences away in this fashion. Some observers have speculated that Buhari’s
Likewise, they do not usually follow such decision was driven by concern about the pos-
a move by transferring the assets in question sibility of angering the Chinese government,
to other investors, but DPR awarded the four which controls Sinopec. Beijing is one of Abuja’s
licence areas to other companies – namely, creditors, and state-controlled Chinese banks
Kaztec Engineering and Salvic Petroleum have lent NNPC and other Nigerian companies
Resources, both based in Nigeria – very shortly billions of dollars to cover the cost of infrastruc-
after rescinding Addax’s rights. (As of press ture projects. ™

Eni may sell some African assets

to fund shift to renewable energy

REGIONAL ITALY’S Eni is reportedly looking into the pos- sources did not say whether the company had
sibility of selling off some of its assets in Africa, slated any of its assets in Egypt, Libya, Nigeria,
the Middle East and East Asia in order to free up Republic of Congo or Angola for sale. They did
resources for renewable energy projects. report, though, that the Italian firm had been in
Industry sources told Reuters last week that talks with several large international oil compa-
the Italian major was interested in following the nies (IOCs), including Total (France) and BP
model it used to hive off its Norwegian assets in (UK), on the possibility of merging assets in the
2019. “The company is working on doing more Middle East and West Africa. It is not clear yet
of the same [as it did with Vår Energi] with cho- whether these talks will bear fruit, they added.
sen partners in West Africa and the Near-Far The sources also pointed out that the com-
East and Far East,” one source explained. pany had a financial incentive to unload at least
The source was referring to Eni’s creation some of its projects, since divestment would
of Vår Energi through a tie-up between its allow it to remove some of its debt load from its
Norwegian subsidiary Eni Norge and a private balance sheet. Eni is currently carrying €26.7bn
equity firm known as HitecVision. Eni still has ($32.23bn) worth of debt, and it will have an eas-
a 69.4% stake in Vår Energi, which is now the ier time raising funds for renewable energy pro-
second-largest oil producer in Norway, turning jects if it no longer has to consolidate this sum at
out around 150,000 barrels per day (bpd). The group level, they explained. ™
Italian company has profited from the deal, as
it has collected nearly $1.3bn in dividends from
Vår Energi over the last two years. These funds
have helped it the cover the cost of switching its
focus from oil and gas to renewable energy.
Eni has not commented on reports that it
might trim its African portfolio, and Reuters’

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