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Magnus Abe debunks ‘$650m oil scam’, says DPR was right to revoke Addax oil licences

Magnus Abe debunks ‘$650m oil scam’, says DPR was right to revoke Addax oil licences
April 27
13:56 2021

Magnus Abe, a former senator and board member of the Nigerian National Petroleum Corporation (NNPC), has denied any involvement in an alleged $650 million oil scam.

In a report, the former lawmaker was accused of plotting transfer of four production sharing contracts (PSCs) licences from Addax petroleum to Kaztec Engineering Limited/Salvic Petroleum Resources Limited.

On March 30, the Department of Petroleum Resources (DPR) revoked the four Addax licences over poor development of the assets.

The PSCs consists of oil mining licence (OML) 123, 124, 126 and 137.


Sarki Auwalu, DPR director, had said over 50 percent of the assets were underdeveloped, which he said cost the government lost revenue.

On Thursday, DPR set up a committee to evaluate the revoked oil blocks of Addax Petroleum in preparation for the formal hand over of the assets to new operators.

A day after, President Muhammadu Buhari restored ownership of the four OMLs to the NNPC.


The Abe-led presidential inter-ministerial committee submitted its report to the federal government on the abandoned $1 billion Kaztec Engineering Limited (KEL) fabrication yard, located in Ilase village, Snake Island, Amuwo-Odofin Council, Lagos state.

Following the president’s decision, a news medium had reported that Abe, in alleged connivance with Timipre Sylva, minister of state for petroleum resources, seeks to use the committee’s report in favour of Kaztec, which is said to be owned by Emeka Offor, who is described as an ally of Sylva.

But in reaction, Abe said the media report was designed to create the impression of a major scandal and arm twist the federal government

He noted that his committee report stressed that aside the 3,000 jobs lost to the collapse of the facility in which Kaztec already invested over $650 million, after Addax declared a force majeure over an unrelated matter, monies invested in equipment were also wasted.


Abe said there is nothing in the committee’s assignment that involved the allocation of oil blocks, alleging that it is Addax which wants to rip off Nigeria.

“In 2015 the federal government under President Muhammadu Buhari in keeping with its anti-corruption agenda accused Addax of tax atrocities which resulted in substantial losses to the federal government,” he said.

“Addax was asked to pay. In response, they declared a force majeure on their exploration activities and cancelled their investments in the oil fields.

“Nigerians must look beyond the needless sensationalism and ask the hard questions that need to be answered.”


Abe argued that the Nigerian company, Kaztec, that he claimed invested millions of dollars in the project with Addax, was forced to bear the brunt of the entire dispute, which was actually between Addax petroleum and the Nigerian government.

He queried whether it was the company accused of abandoning its Nigerian investments for over 10 years or the DPR that tried to hold them to account that should be held responsible for allegedly deceiving the president as claimed by the media report.


The former lawmaker added that the committee report focused exclusively on measures and reliefs which the government can legally extend to the company to salvage the losses to an indigenous company.

“There is absolutely no scam on oil blocks, or contracts involved in the Kaztec committee report. Issues of revocation, allocation and management of oil blocks are  exclusively the preserve of the DPR,” he said.


“In the light of the abandonment of the oil blocks, the lack of investment in the field, the colossal losses to the Nigerian economy by the actions of Addax, DPR was right to recommend a revocation of the mining leases issued to Addax in the national interest.”


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