By William Clowes on 2/21/2021
(Bloomberg) --A Nigerian court restricted Royal Dutch Shell Plc’s access to its bank accounts in the West African country amid a legal dispute with a local oil producer over a pipeline deal six years ago.
Aiteo Eastern E&P Co. Ltd. is demanding billions of dollars in damages, claiming Shell misrepresented the condition of the pipeline and under-counted the volume of crude one of its facilities received from the Nigerian firm, according to court documents seen by Bloomberg.
Shell said Aiteo’s lawsuit is baseless and it is working to overturn the freezing order.
The dispute is just one among a growing list of legal entanglements related to Shell’s business in Africa’s largest crude producer. Since the start of the year, a Dutch court has ordered the company to pay compensation for oil spills in two villages more than a decade ago, and the U.K. Supreme Court allowed 40,000 fishermen and farmers to sue Shell in England.
The legal precedents could result in the company facing more cases related to Nigeria in its home country.
A federal court in Lagos, Nigeria’s commercial hub, on Feb. 15 retained an injunction issued late last month directing Shell not to withdraw funds held at 20 banks “without first preserving or ring-fencing” almost $2.8 billion. The judge, Oluremi Oguntoyinbo, has adjourned proceedings until Feb. 24.
Aiteo’s allegations relate to its $2.4 billion purchase in 2015 of a 45% interest in an oil block and pipeline from a trio of multinational companies: Shell, Total SE and Eni SpA. Nigeria’s state-owned energy company owns the rest.
The African company secured a loan of almost $1.5 billion from local and international banks to fund its entrance into the oil exploration and production business, according to a lawsuit the company filed against four Shell units and the parent company on Jan. 15. Aiteo is controlled by prominent Nigerian businessman Benedict Peters.
Aiteo alleged in the lawsuit that “fraudulent misrepresentations” made by Shell’s local unit, the former operator of the assets, before the sale mean it is “practically impossible” for the company to “meet its repayment obligations to its financiers.” The company claims the pipeline, the Nembe Creek Trunk Line, or NCTL, was in a more degraded state and more prone to crude theft than Shell advertised.
Subsequent to the transaction, Aiteo also alleges that Shell understated the volume of crude delivered to its Bonny oil and gas export terminal through the NCTL by Aiteo and other local producers. The company is demanding that Shell refund it with 16 million barrels of oil or $1.3 billion.
The full penalty sought in Aiteo’s lawsuit is for more than $9 billion, including $5 billion in general damages, $799 million to cover the purchase of the NCTL and $933 million to reimburse pipeline repairs.
Shell “is working to secure an expeditious discharge of the freezing injunction which we believe was obtained by Aiteo without any valid basis,” a spokesman for the company’s Nigerian unit, SPDC, said by email.
Aiteo’s allegation of “crude theft/diversion” related to the Bonny terminal is “factually incorrect,” Shell said. Rather, it is a “distinct issue” concerning a directive given by Nigeria’s Ministry of Petroleum Resources to SPDC, as operator of the facility, saying that the company should reallocate oil between producers that inject into another pipeline and those that use the NCTL.
Shell plans to refund 2.1 million barrels from producers, including SPDC and Total, that pump crude into the Trans Niger Pipeline to firms that use the NCTL, according to a letter the company sent the petroleum resources ministry on Feb. 8. The allotment to Aiteo will be 1 million barrels, with the largest share taken from a joint venture headed by SPDC.
The readjustment, which relates to calculations made at the Bonny terminal between June 2016 and June 2017, is part of “normal industry practice,” Shell said.
"oil" - Google News
February 21, 2021 at 08:28PM
https://ift.tt/2ZyjFfG
Nigeria blocks Shell's bank accounts over oil pipeline dispute - WorldOil
"oil" - Google News
https://ift.tt/2PqPpxF
Shoes Man Tutorial
Pos News Update
Meme Update
Korean Entertainment News
Japan News Update
Bagikan Berita Ini
0 Response to "Nigeria blocks Shell's bank accounts over oil pipeline dispute - WorldOil"
Post a Comment