Addax $3.4bn deal a litmus test for Buhari

Sir Emeka Offor’s involvement

Hector Igbikiowubo 22 October 2015, Sweetcrude, Lagos – While the President Buhari administration takes its time to determine how to proceed with the cleansing of Nigeria’s Augean stable, observers and energy enthusiasts have identified a last minute deal embarked upon by the President Goodluck Jonathan administration barely one month before leaving office as a litmus test for the current government’s fight against Nigeria’s culture of sleaze and corruption.

addax-logoThe President Jonathan administration committed Nigeria to a highly controversial albeit fraudulent ‘out of court settlement’ deal to pay Addax Petroleum Development Nigeria Limited $3.4 billion in what the company described as miscalculation of oil royalty and taxes, and the breach of their 1998 Production Sharing Contract, PSC, with the Nigerian National Petroleum Corporation, NNPC, regarding OPL 98/118, now OML 123, 124, 136 and 137.

Speaking on the sideline of the 70th United Nations General Assembly in New York, at a meeting with President Xi Jinping of China, President Muhammadu Buhari reiterated his administration’s resolve to prosecute all those found culpable of looting the NNPC.

This resolve has brought the last minute deal between Addax Petroleum and the Jonathan administration into sharp focus.

SweetcrudeReports gathered that Addax had written to the government of Jonathan claiming it had paid too much tax on OML 123 and 124 based on claims from the NNPC dating back to December 2001.

Not satisfied with the response it received from the government, in December 2014, Addax Petroleum Development Nigeria Limited and Addax Petroleum Exploration (Nigeria) Limited entered litigation against the NNPC, demanding financial recompense in what they described as miscalculation of oil royalty and taxes, and the breach of their 1998 Production Sharing Contract, PSC, with the government.

Further checks revealed that in a letter dated 2ndApril 2015, Mr. Mohammed Adoke, the General and Minister for Justice under the Jonathan government proposed that  the president approves an out-of -court settlement of the lawsuit filed by Addax.

On 25th May 2015,  barely 4 days to the end of President Jonathan’s tenure in office, a federal high court judge in Abuja concluded the terms of the out-of-court settlement. However, the judgment order excluded the office of the Attorney General because Mr. Adoke did not send any lawyer to represent government at the final judgment.

The terms of the out-of-court settlement puts the total value of NNPC’s indebtedness to Addax at $3.491,588,722.64 (three billion, four hundred and ninety one million, five hundred and eighty eight thousand, seven hundred and twenty two dollars, sixty four cents).

The judgment debt is expected to be paid to Addax over the next few years through crude oil lifting concessions.

Sir Emeka Offor’s involvement

Sir Emeka Offor, the Chairman of Chrome Group and Kaztec Engineering has been fingered as the brain who engineered the out of court settlement between Addax and the NNPC.

Sir Emeka Offor’s Kaztec Engineering got the contract for development of the sub-sea system of Addax’s OML 123 and 124.

Checks reveal that following the media buzz surrounding Sir Emeka Offor’s involvement in the activities of Addax in Nigeria, the company’s management in Geneva has asked Samuel Blanchor, the Chief Comptroller of the Group to investigate and to determine whether any laws had been broken.

Further checks reveal that Addax did not get a go-ahead in 2014 from the National Petroleum Investment and Management Services Company, a subsidiary of the NNPC, for the development of OML 137 which consists of Ofrima north, Atuama, Udele and Asa fields.

Development of these fields currently in excess of $2 billion has been revised upwards severally because of bills from Sir Emeka Offor’s Kaztec Engineering.

While Samuel Blanchor goes about his investigation in Geneva, perhaps he can start by taking a look at what appears to be questionable single source contract awards from Addax operations in Nigeria to Sir Emeka Offor’s Kaztec Engineering valued at $1.243 billion between.

Investigations reveal that these contracts were awarded within a six year period: 2009 to 2014, without recourse to competitive tender.

Further investigations reveal that the contract awards from Addax to Kaztec Engineering have been marked by irregularities and inconsistencies which exposes Addax/Sinopec to investigations of corruption by Nigerian, UK and US authorities


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