Nigeria: Shell Rattled By Restrictions On Bank Accounts, Moves to Leave Order

There are strong indications that last Tuesday’s injunction of a Federal High Court, Lagos, disallowing Royal Dutch Shell’s Nigerian subsidiary from withdrawing cash at 20 local banks until it ring-fences prospective damages in a lawsuit brought versus the oil significant by Aiteo Eastern E&P is currently rattling the oil company.

The interim Mareva injunction is focused on recovering the money value of more than 16 million barrels of crude presumably diverted by the oil giant from the indigenous oil business, AITEO.

However, SPDC is stated to have actually mandated its legal representatives to work round the clock in order to get the injunction left when the court case resumes next Wednesday.

Although a source from SPDC clarified the other day that 15 out of the 20 banks so determined had considering that stated that their names were listed in mistake, considering that they were not holding any account of the SPDC, it was collected that the freezing of the oil firm’s account in the other 5 banks is currently threatening its operations.

According to the source, “there is no way such limiting order will not affect the business’s activities. It is bound to impact its activities since expenses need to be paid and such hang on the company’s account would impact its dedication to its business partners.”

Consequently, SPDC’s legal representatives are stated to be working round the clock to guarantee the injunction is left on Wednesday in order to bring about a smooth running of the business.

Although the representative for SPDC, Mr. Bamidele Odugbesan, stated the company was working to secure an expeditious discharge of the freezing injunction which it alleged was gotten by Aiteo with no valid basis, however, he did not disclose how the business would do so.

Court documents seen by Reuters reveal that Aiteo is looking for payment over what it said was the bad condition of the pipeline and associated lost oil sales.

Aiteo is looking for about $4 billion in overall over alleged issues with the Nembe Creek Trunk Line (NCTL) pipeline it bought from the Anglo-Dutch group in 2015 and over claims Shell undercounted its oil exports.

Aiteo likewise accuses Shell of purposeful inappropriate metering of the Nigerian business’s oil exports from the Bonny Light terminal.

Odugbesan said the claims are “factually inaccurate”.

Aiteo decreased to discuss a continuous legal case.

A declaration by the SPDC representative described: “The claims underpinning the interim freeze order acquired by the plaintiff, Aiteo Eastern E&P Business Limited, relate to the sale of the interests of SPDC and 2 other SPDC JV partners in the Nembe Creek Trunk Line (NCTL) and OML 29 to Aiteo in 2015; and unrefined reallocation programme between injectors into the SPDC JV’s Trans Niger Pipeline and injectors into the Aiteo NCTL which is a regular market practice.

” The crude theft/diversion accusation is also factually incorrect. This is a distinct problem that associates with the regulation by the Department of Petroleum Resources to SPDC as operator of the Bonny Oil and Gas Terminal, a property coming from the SPDC Joint Endeavor, to execute a crude re-allocation programme between injectors into the SPDC JV’s Trans Niger Pipeline and injectors into the NCTL.”

Justice Oluremi Oguntoyibo, while offering the interim Mareva injunction, directed the banks where the Shell business operate accounts in Nigeria to “ring-fence any money, bonds, deposits, all types of flexible instruments to the worth of $2.7 billion and pay all standing credits to the Shell companies up to the worth into an interest yielding account in the name of the Chief Registrar of the court, who is to hold the funds in trust” pending the hearing of the movement and determination of the movement on notification for interlocutory injunction submitted prior to it by AITEO.

AITEO, alongside some other native oil producers, have actually had a lengthy dispute with Shell declaring that the business shortchanges them utilizing the unapproved approach to compute the volume of crude it lifts on their behalf from the terminal. They collectively allege that Shell deploys underhand practices including utilizing unapproved meters to facilitate crude theft.

Following an examination into the dispute by the Department of Petroleum Resources (DPR), Shell in a letter to the company, admitted that it had undoubtedly installed unapproved metering systems and accepted refund more than 2 million barrels of crude it had actually unlawfully taken from the producers (Belema Oil, AITEO, Eroton and NewCross) in between 2016 and 2018.

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Post Author: kisded@yahoo.com