Nigeria: Shell Rattled By Restrictions On Bank Accounts, Transfer To Leave Order

Nigeria: Shell Rattled By Restrictions On Bank Accounts, Transfer To Leave Order

There are strong indications that last Tuesday’s injunction of a Federal High Court, Lagos, barring Royal Dutch Shell’s Nigerian subsidiary from withdrawing money at 20 local banks till it ring-fences prospective damages in a lawsuit brought against the oil major by Aiteo Eastern E&P is already rattling the oil firm.

The interim Mareva injunction is targeted at recovering the money worth of more than 16 million barrels of unrefined allegedly diverted by the oil giant from the indigenous oil company, AITEO.

Nevertheless, SPDC is said to have mandated its attorneys 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 recognized had since declared that their names were listed in error, because they were not holding any account of the SPDC, it was gathered that the freezing of the oil company’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 impact the company’s activities. It is bound to affect its activities because costs have to be paid and such hang on the business’s account would affect its dedication to its service partners.”

Subsequently, SPDC’s lawyers are said to be working round the clock to make sure the injunction is abandoned on Wednesday in order to cause a smooth running of the business.

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

Court documents seen by Reuters show that Aiteo is seeking payment over what it stated was the bad condition of the pipeline and associated lost oil sales.

Aiteo is seeking about $4 billion in total over supposed 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 implicates Shell of deliberate inappropriate metering of the Nigerian business’s oil exports from the Bonny Light terminal. It is seeking $2.7 billion over the pipeline deal plus $1.28 billion for lost oil sales, the court files reveal.

Odugbesan said the allegations are “factually incorrect”.

Aiteo decreased to comment on an ongoing legal case.

A statement by the SPDC spokesperson described: “The claims underpinning the interim freeze order obtained by the complainant, Aiteo Eastern E&P Business Limited, connect to the sale of the interests of SPDC and two 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 industry practice.

” The unrefined theft/diversion accusation is also factually incorrect. This is a distinct issue that associates with the directive by the Department of Petroleum Resources to SPDC as operator of the Bonny Oil and Gas Terminal, a property belonging to the SPDC Joint Endeavor, to execute an unrefined re-allocation program in 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 companies operate accounts in Nigeria to “ring-fence any money, bonds, deposits, all forms of flexible instruments to the worth of $2.7 billion and pay all standing credits to the Shell companies approximately 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 motion and decision of the movement on notice for interlocutory injunction filed before it by AITEO.

AITEO, alongside some other native oil producers, have actually had a lengthy conflict with Shell alleging that the business shortchanges them utilizing the unapproved method to compute the volume of crude it raises on their behalf from the terminal. They jointly declare that Shell releases underhand practices consisting of utilizing unapproved meters to help with unrefined theft.

Following an examination into the disagreement by the Department of Petroleum Resources (DPR), Shell in a letter to the firm, confessed that it had actually indeed installed unapproved metering systems and consented to refund more than two million barrels of crude it had actually unlawfully drawn from the manufacturers (Belema Oil, AITEO, Eroton and NewCross) between 2016 and 2018.

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