Court Freeze Order: Shell denies crude diversion allegation, insist injunction was baseless
LAGOS-FOLLOWING the court order for all its accounts and that of its sister companies to be frozen, The Shell Petroleum Development Company, SPDC has on behalf of all Shell companies in Nigeria issued a statement denying any act of crude oil divergence, even as it insists that the court injunction which was sought by AITEO E&P remains baseless.
In a point by point statement issued by its media relations manager, Bamidele Odugbesan Shell stated that while it was true that a Federal High Court sitting in Lagos granted an interim ex parte order on 25th January 2021 freezing the bank accounts of some named Shell companies in Nigeria, some media reports have linked the court order to the allegation of crude diversion against the Shell Petroleum Development Company of Nigeria Limited (SPDC).
“It is important to note the claims underpinning the interim freeze order obtained by the plaintiff, Aiteo Eastern E&P Company Limited, relate to the sale of the interests of SPDC and two other SPDC JV partners in the Nembe Creek Trunk Line (NCTL) and OML 29 to Aiteo in 2015; and crude reallocation programme between injectors into the SPDC JV’s Trans Niger Pipeline and injectors into Aiteo’s NCTL which is a normal industry practice.
The disputes are subject of ongoing litigation and SPDC is working to secure an expeditious discharge of the freezing injunction, which we believe was obtained by Aiteo without any valid basis”.
The Oil giant stated further that the crude theft/diversion allegation is also factually incorrect. “This is a distinct issue that relates to the directive by the Department of Petroleum Resources to SPDC as operator of the Bonny Oil and Gas Terminal, an asset belonging to the SPDC Joint Venture, to implement a crude re-allocation programme between injectors into the SPDC JV’s Trans Niger Pipeline and injectors into the NCTL.
Crude allocation review and re-allocation is a normal industry practice to re-allocate previous provisional allocated volumes under the directive and supervision of DPR, and this is not an exercise resulting from crude diversion, underreporting or theft at the terminal. This industry practice is not peculiar to the SPDC-operated Bonny Oil and Gas Terminal alone and does not translate into any loss of volumes to the Federal Government of Nigeria.
The re-allocation in issue was initiated by SPDC as operator of the Bonny Oil and Gas Terminal, while the DPR validated and confirmed it for implementation for the concerned oil producers.
Crude oil production metering and allocation are subject to specific guidelines issued by the industry regulator, DPR. SPDC strictly adheres to these guidelines and the implementation is regularly verified by the regulator.
DPR, in response to media enquiries on Saturday 13th February 2021 described the allegations of crude diversion/theft against SPDC as untrue and urged that the allegations be disregarded.
SPDC and all Shell companies in Nigeria are responsible Corporate citizens who conduct their operations in accordance with applicable laws and industry best practices” it enthused.