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By Adewale Sanyaolu
Nigerian workers in Chinese-owned oil firm, Addax Petroleum Development Nigeria Limited (APDNL), are in a state of confusion on their future in the company following closure of its offices in Geneva, Houston and Aberdeen, over alleged bribery of foreign officials by its management early this week.
The company said on Monday that it was shutting its offices in Geneva, Houston and Aberdeen, a month after it agreed to pay 31 million Swiss francs ($31.85 million) to settle charges slammed on it due to suspected bribery of foreign officials.
Last month, Addax Petroleum equally paid a $32 million fine to close its Nigeria bribery case, bringing the total payments to $63.5 million.
According to African Energy Intelligence, “Addax pays up, switches up its team and settles its legal case.”
But some workers of the firm in Nigeria are apprehensive that the decision of the parent company, Sinopec International Petroleum Exploration and Production Corporation (SIPC) to shut down two of its offices in Europe and one other in the United States of America (USA) may be extended to Africa and Nigeria in particular.
Confirming a report in the Tribune de Geneve newspaper, Addax said SIPC, would integrate the three offices into a new technical centre in Beijing. A statement by Addax said SIPC was streamlining its business model in response to low oil prices.
“This rationalisation, designed to reduce management duplication, improve efficiency and secure long-term business sustainability, will see Addax Petroleum’s Geneva office integrated with SIPC’s headquarters in Beijing, and the Geneva office closed by the end of this year.”
Addax’s operating companies will start reporting directly to SIPC headquarters from August 9, and Addax will run a consultation process for its 174 affected staff in Geneva to mitigate the impact of the organisation change, it said.
The newspaper said Geneva-based workers were informed of the closure on Monday afternoon.
Addax has more than 1,000 employees and operations in Nigeria, Gabon and Cameroon, as well as joint ventures with Genel in Iraqi Kurdistan and Repsol in the British North Sea.
Prosecutors for the Swiss canton of Geneva had investigated the company, whose Chief Executive Officer and Legal Director were also charged, over several millions of dollars in payments to a company and several lawyers in Nigeria.
A four-month investigation found the payments were not sufficiently documented and doubts remained on their legality although no criminal intent was established, the prosecutor’s office said.
The CEO and Legal Director of Addax Petroleum in Geneva were arrested and charged with suspected bribery of foreign officials in Nigeria early this year. A criminal procedure was also opened against the company.
Addax acknowledged possible organisational shortcomings and had taken measures to improve internal anti-corruption procedures. With the settlement, the cases against the CEO and Legal Director have also been closed, a spokesman for the prosecutor had said.
However, investigations showed that Kaztec Engineering received over $80 million in payments from Addax Petroleum Nigeria Limited (a subsidiary of APUK) for construction projects. It was gathered that other payments in excess of $20 million were recorded as legal expenses that were made to several ‘legal advisors’ in Nigeria and the United States.
Addax Petroleum Nigeria was said to have awarded Kaztec Engineering Nigeria Limited five contracts worth $1.244 billion between 2009 and 2014 of which Deloitte LLP had said in a statement that it could not obtain a business rationale or validity for the payments made by Addax Petroleum Nigeria. “The magnitude of these payments appears to be in excess of the demonstrable value of work performed and their purpose and timing raise issues, which have not been resolved,” Deloitte LLP disclosed.
Regarding the payments to ‘legal advisors’, Deloitte LLP noted that, “among other concerns, it has not been clearly established what services were delivered for the amounts paid. In addition, we have received a number of whistle-blowing allegations, both from within and external to Addax, some of which allege that such payments have been made to bribe foreign government officials and that certain amounts have been embezzled by certain members of management within Addax Petroleum group.”
Recall that Addax was bought by China’s state-owned Sinopec, Asia’s largest oil refiner in 2009. It said in an emailed statement that its CEO had resumed his duties while its chief legal officer retired on June 30.
“Addax Petroleum is committed to conducting its business with the highest level of integrity and in full compliance with applicable laws, regulations and industry standards,” the company had said in a statement.
Addax began operations in Nigeria in 1998 after signing two Production Sharing Contracts (PSCs) with the Nigerian National Petroleum Corporation (NNPC).
“In Nigeria, Addax Petroleum’s producing assets include 11 field complexes with around 80 production wells in concession OML123, two fields with 15 producing wells in concession Oil Mining Lease (OML) 124 and two fields with 17 production wells in concession OML 126.”
