NEWS
OML 11 controversy: SPDC appeals High court judgment
Yemie ADEOYE
LAGOS-FOLLOWING the controversy emerging from some oil and gas assets belonging to Shell Petroleum Development Company, SPDC, located in Kidney island, Rivers state, the Oil giant has expressed disappointments over the latest judgement on the matter from the Rivers State High Court which affirmed the enforcement of the purported sale of interests in SPDC’s JV’s assets in Kidney Island as well as specified interests in OML 11 to the Rivers State Government.
This was contained in a statement issued by the Anglo-Dutch oil giant in Lagos, signed by the Media Relations Manager Bamidele Odugbesan and made available to Biztellers.com.ng via electronic mail. Expressing it’s disappointment further, SPDC stated that in the underlying judgement (Chief Agbara and Others v. SPDC, ),which is being enforced by the sale, the claimants themselves accepted in the High Court in England that the claim was “miscalculated” and “materially overstated”. SPDC has therefore filed an appeal and an application for a stay of execution of this recent judgment issued by the Rivers State High Court on 13 August 2020.
Osagie Okunbor,
Managing Director, The Shell Petroleum Development Company of Nigeria (SPDC) and Country Chair of Shell Companies in Nigeria.
Prior to the instant case, the Rivers State Government had filed a similar case at the Federal High Court Abuja asking the Federal High Court in Abuja to direct the Minister of Petroleum Resources to recognise the same purported interest acquired through auction sale. The Rivers State Government withdrew the Abuja case in July 2020 and refiled this new case at the Rivers State High Court without joining the Minister of Petroleum Resources. An application by SPDC to join the Minister of Petroleum Resources to the suit as a necessary party for a just determination of the issues was denied by the Judge. Under the Nigerian Petroleum Act, any acquisition or assignment of interests in a licence or lease must have the consent of the Minister of Petroleum Resources.
The root case, Chief Agbara and Others v. SPDC, which led to the purported sale of interests SPDC JV’s assets is still the subject of ongoing proceedings in several courts, including the supreme court, and it remains the position of SPDC that no payment is due and any purported sale or enforcement of payment is premature and prejudicial to ongoing proceedings. The auction sale is also being challenged on appeal by SPDC.
The root case has its origin in a spill caused by third parties during the Nigerian Civil War, a challenging period which resulted in significant damage to oil and gas infrastructure in the Niger Delta region. While SPDC does not accept responsibility for the spill, the affected sites in Ejama Ebubu community were fully remediated, and this was certified by the government regulator.
The claim for N17billion as damages was first brought by the Ejama Ebubu community against SPDC in 2001 in the Federal High Court of Nigeria. In 2010, the court gave judgment against SPDC and awarded the claim without SPDC being given reasonable opportunity to defend the facts of the case. Indeed, this case has focused too long on procedural issues and not on its merits – we have always been clear that we are ready to defend this case based on the available facts.
SPDC appealed the 2010 judgment and obtained an order to stay the execution of the judgment upon the provision of a bank guarantee issued by First Bank of Nigeria Limited in favour of the claimants. Despite this matter being the subject of ongoing proceedings in the Nigerian courts, the claimants went ahead to seek to enforce the judgment in both Nigeria and England.
The English court last year rejected the claimants’ attempt to enforce the Nigerian court judgment in the UK, referring to a ‘breach of natural justice’ in the proceedings against Shell in Nigeria. The English court also found that the claimants had “materially over-stated” the value of the judgment which the claimants admitted was N34.716billion. The court therefore ruled that it would not be just and convenient for a Nigerian judgment to be enforced in the UK which the claimants acknowledge is “miscalculated”.
On Monday, March 2, 2020, the Federal High Court sitting in Abuja issued an order attaching the sum of N182billion in First Bank of Nigeria Limited’s statutory account with the Central Bank of Nigeria in favour of Ejama Ebubu community in Rivers State.
SPDC and other parties affected by the March 2, 2020 order of the Federal High Court filed separate appeals, as well as applied to set aside the order and restrain its execution pending the appeal decision. In accordance with the spirit of fair hearing in the Nigerian judicial system, we remain of the view that until the pending appeals are heard and determined, SPDC is not liable to make any payments, and therefore none any of its assets or interest should not be attached to satisfy the judgement.
SPDC operates the SPDC Joint Venture on behalf of the JV partners which include the Federal Government, represented by Nigeria National Petroleum Corporation (NNPC), with 55% participating interest.
The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) has raised concerns over alleged monopolistic practices by Dangote Refinery, following a public dispute about fuel pricing in the downstream petroleum sector.
Recall that the refinery, Africa’s largest, recently disclosed its petrol pricing at N990 per litre in trucks and N960 per litre into ships, a move it justifies as being in line with international rates.
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PETROAN, however, sees this as an attempt to suppress competitors and dominate the Nigerian market.
The rift began when Dangote Refinery claimed that complaints from marketers regarding its pricing were fueled by intentions to import cheaper, potentially substandard products.
In response, PETROAN strongly rejected these allegations, suggesting that Dangote’s claims are tactics designed to maintain a monopoly in the sector.
Joseph Obele, PETROAN’s spokesperson, stated that the association remains committed to importing high-quality products at more competitive rates to ensure affordability for Nigerian consumers.
According to PETROAN, competition in the market is essential for achieving fair pricing, and any attempt to stifle it would be detrimental to consumers.
They argue that Dangote Refinery’s pricing should reflect production costs and fair margins rather than international benchmarks, especially given concessions granted by the government for the refinery’s establishment.
PETROAN also announced its plans to partner with foreign refineries and financial backers to import premium-quality petroleum products at prices below current rates.
The association aims to enter the market by December 2024, pending necessary regulatory approvals.
“The allegations that PETROAN will import substandard products are unfounded and aimed at creating an unfair playing field,” the statement read.
PETROAN warned that similar claims in the past had led to significant price hikes when competitors were pushed out, emphasizing that the entry of new players into the market would lead to more competitive pricing and ultimately benefit Nigerian consumers.
PETROAN expressed appreciation for President Bola Tinubu’s commitment to revitalizing Nigeria’s state-owned refineries and urged the government to consider privatizing the Port Harcourt and Warri refineries once rehabilitation is complete.
The association believes a transparent privatization process will help strengthen Nigeria’s downstream sector and counter monopolistic tendencies.
To address the ongoing pricing challenges in the sector, PETROAN called on the government to convene a comprehensive meeting of industry stakeholders, including major associations like IPMAN, DAPPMAN, MEMAN, NUPENG, and PENGASSAN.
PETROAN believes that collaboration among these groups will be instrumental in establishing a sustainable and competitive pricing framework for petroleum products in Nigeria.
Sultan of Sokoto, Sa’ad Mohammad Abubakar II, has called on Nigerians to avoid publicly criticizing their leaders, instead urging citizens to place their trust in God to address leadership concerns as He deems fit.
Speaking at the Regional Conference on Climate Change-Induced Conflicts in Northern Nigeria, organized by the Kaduna State Bureau of Interfaith in collaboration with International Alert, the Sultan emphasized faith and patience in navigating the country’s challenges.
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Acknowledging Nigeria’s current economic and social hardships, the Sultan encouraged continuous prayer, not only for the nation but for its leaders as well.
“Even though many feel times are particularly hard, we believe relief will come. Let’s increase our prayers for our leaders, trusting God to address them in His way,” he said, expressing hope that divine intervention could bring stability and prosperity.
The Sultan reminded political leaders of their ultimate accountability to God, cautioning that they will stand alone on the Day of Resurrection, with only their deeds to support them.
“On that day, every leader will stand alone. Governors, advisers—none will have support except their own deeds. Let us act with a deep sense of responsibility and fear of God,” he stated.
Addressing religious leaders, he warned against misleading their followers for personal gain, underscoring the trust many place in their religious guidance.
“Only God can save any human being,” he said, encouraging Nigerians to remain faithful and discerning in their spiritual beliefs. “Focus on worshiping Allah and leave the rest to Him. Don’t follow those who might lead you astray.”
With leaders from various religious communities, including the President of the Christian Association of Nigeria (CAN), in attendance, the Sultan called for unity, resilience, and communal effort to tackle pressing issues such as climate change, poverty, and insecurity in the northern region.
He praised the North’s history of unity and resilience, warning against divisive narratives that threaten communal harmony. “When we are united, we can face any challenge and build a prosperous community,” he asserted.
The Sultan’s remarks come amid ongoing social and environmental issues in the region, including a recent surge in climate-related challenges that have exacerbated poverty and security threats.
In light of these issues, he called on both Muslims and Christians to intensify their prayers, saying, “Our country faces many challenges, and we must turn to God in prayer. Let us intensify prayers in our mosques and churches.”
In a decisive move, President Bola Tinubu has ordered the immediate release of all minors detained by police during the recent #EndBadGovernance protests.
The directive, announced by Minister of Information and National Orientation, Mohammed Idris on Monday, underscores the government’s commitment to protecting children’s rights and ensuring justice.
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Idris confirmed that President Tinubu’s directive prioritizes the welfare of detained minors, instructing the Ministry of Humanitarian Affairs to facilitate their safe reunification with their families.
A committee led by the Ministry of Humanitarian Affairs will be established to oversee the welfare of the released minors and ensure compliance with the president’s orders.
Additionally, President Tinubu has directed a formal investigation into the actions of law enforcement agencies involved in the arrests.
The president emphasized that any misconduct uncovered during the investigation will result in disciplinary action, affirming his administration’s dedication to accountability within law enforcement.
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