Mr. Emmanuel Ibe Kachikwu,

Mr. Emmanuel Ibe Kachikwu,

$12.5billion Oil Suits: FG Floors IOC’s As Court Strikes Out Objection

A Federal High Court sitting in Lagos has struck out the preliminary objection filed by the Nigerian Agip Oil Company Limited (“Agip”) against the Federal Government of Nigeria (“FGN”). The preliminary objection dated March 24, 2016, which came on the heels of the lawsuits filed by the FGN against notable multinational oil corporations, sought an order of the Court striking out the suit filed by the FGN on the grounds that the FGN has failed to disclose a reasonable cause of action against the Defendant. In opposition to the preliminary objection, the Federal Government through its Legal Team led by Professor Fabian Ajogwu (SAN) filed a counter affidavit praying the court to discountenance the prayers of Agip and hold that there exists a right and a reasonable cause of action against the Defendant.

After a thorough consideration of the totality of the application, the Court in its ruling delivered on May 17, 2016, agreed with the arguments of Counsel to the FGN and held that the FGN had a reasonable cause of action against the multinational oil corporation.

The Federal Government had on March 3, 2016 instituted civil actions against multinational oil corporations- Shell, Chevron, Agip and other major oil companies- in a bid to recover over N2 trillion, believed to be proceeds of unremitted crude oil revenue. The unremitted revenue is from over 57 million barrels of crude oil shipments that were either not declared or under-declared between 2011 and 2014.

The federal government in the suits, stated that the decline in crude oil revenue recorded in 2014 ‘necessitated an intelligence based gathering of data, which showed that part of the reasons for the decline in the revenue from crude oil exploration was the un-declaration and/or under-declaration of crude oil shipments’.

According to the civil actions, it was discovered that ‘the crude oil declared to have been exported from Nigeria, was less than what was declared to have been imported into the United States using the same shipment by the same vessel on the same bill of lading’.

The lawyers representing the government revealed that the missing revenue accrued to Nigeria from the illegal shipments made between 2011 and 2014 to buyers in the US alone is worth a total of $12.7Billion. At the current official exchange rate, the said amount would be worth over N2.4Trillion.FG

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