Moving People

News

/ News / Article

  • Bloomberg

Nigerian court freezes Shell accounts in dispute over oil deal





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.

1 view
construction-image1.jpg

Subscribe and keep up to date with all the latest news from Oakmark

Subtle Shapes Transparent
WEST AFRICA'S NO.1 ECONOMIC AGENTS

Oakmark Global Vision provides a bespoke business package to established corporate bodies, investors, and entrepreneurs who desire to enter the West & Pan African market. Find out more >

© 2021 Oakmark Global Vision Ltd - All Rights Reserved.

UK Company No. 07634879 / Nigeria Company No. RC 1288232

Regional Office

International Office

1 Kandi Close, Off Aminu Kano

Crescent, Wuse 2, Abuja F.C.T

Nigeria 

+234 -(0)- 929 207 02

+234 (0) 704 497 6500

info@oakmarkglobalvision.com

King Court, 17 School Road

Hall Green, Birmingham

United Kingdom  B28, 8JG

+44 (0) 121 244 1814

+44 (0) 746 625 2505

info@oakmarkglobalvision.com

 Oakmark Global Vision Limited