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Court restores oil fields to Transnational Energy

  • $20m damages awarded against Nigeria

A Federal High Court in Abuja has set aside the purported reversal of the consent given by the Federal Government for the farm-out agreement between Chevron and Transnational Energy Limited (TEL) on the Abigborodo and Hely Creeks marginal fields in the Oil Mining Lease (OML) 49.

The court, in a judgment delivered by Justice Taiwo Taiwo, upheld the plaintiffs’ claims and granted all the reliefs sought, including an award of $20 million in damages against the defendants, who are Federal Government’s agents.

The judgment was on a suit filed by Transnational Energy Limited (TEL) and Bresson A. S. Nigeria Limited.

The defendants were: Minister of Petroleum Resources; Minister of State, Petroleum Resources; Department of Petroleum Resources (DPR); National Petroleum Investment and Management Services (NAPIMS) and the Attorney General of the Federation (AGF).

The plaintiffs, through their lawyer, Dr. Sijuade Kayode, claimed that a farm-out agreement on the two marginal fields was concluded between TEL and the joint venture operators, Chevron Nigeria Limited, in 2017, amongst others purposes, to provide feedstock to a gas-to-power project developed by TEL and its partners, which started in 2012.

They stated that the DPR, in a letter, dated February 20, 2017, conveyed a letter of ministerial consent by the Minister of Petroleum Resources approving the farm-out and its terms.

The plaintiffs added that the DPR, in its letter, equally directed TEL to pay a prescribed premium to Federal Government, after which the farm-out will become effective, a directive TEL complied with by paying the prescribed fee of $639,820.65.

Rather than allow the plaintiffs to enjoy the benefits of the agreement, after the Federal Government acknowledge receiving TEL’s payment, the then Chief of Staff to President Muhammadu Buhari, the late Abba Kyari, wrote a memo, purporting to revoke the earlier ministerial consent, claiming to have acted on the instruction of the President.

They added that the DPR, without any notice to the farmee (TEL), put the two fields in the 2020 marginal fields basket, even though the fields were not part of the original 57 of fields approved for the bid round, a decision TEL and its sister company in the power business, Bresson A. S. Nigeria Limited, challenged by filing the suit.

The plaintiffs exhibited their audited accounts, business plan and financial model, which showed that both plaintiffs had jointly expended US$22,718,000.00 on the development of the gas and power side of the project.

They also exhibited their financial models in arguing that they have lost over US$164 million due to the actions of the defendants, while Federal Government may have equally lost over US$68million in royalty and taxes not earned as a result of the actions of the defendants.

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