Aiteo demands $2.5bn refund from Shell over OML 29

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For More Enquiry: 08052442020

Aiteo Eastern Exploration and Production Company Ltd is making a demand for refund of $2.5 billion from Shell Petroleum Development Company, SPDC over the sale of Oil Mining Licence 29.

The claim was made in a suit against Shell (the defendant) marked, FHC/ABJ/C8/738/2021, and filed by its counsel, Kemi Pinheiro, SAN.

The $2.5 billion comprises a court order for Shell to refund to Aiteo $46.2 million as payment attributable to Kugbo West and Okiori oil wells being money had and received for a consideration which had failed.

Another $52 million being the interest that ought to have accrued on the sum paid on the two wells, $500,000 general damages, payment of $2.1 billion as the amount Aiteo would have derived from the sale of 32,000,000 barrels of crude oil and other petroleum products from the Kugbo West and 41,000,000 barrels of crude oil and other petroleum products from Okiori wells.

Aiteo at the Federal High Court sitting in Abuja, alleged in its July 27 statement of claim that shell, “knew or ought to have known” that it had handed over the wells to the NNPC for which it also “received valuable consideration in or about 2009 prior to the agreement for assignment.”

According to Aiteo, Shell had sold two Marginal Fields – Kugbo West and Okiori – to it, which it had already handed over to the Federal Government\Nigerian National Petroleum Corporation, NNPC.

The firm averred that the defendant breached a fundamental term of the agreement for assignment dated October 17, 2014, concerning the Kugbo West and Okiori oil wells.

SPDC was the legal and beneficial holder of a 30 percent undivided participating interest in OML 29, which is part of the undivided percentage interest held by the defendant in conjunction with TEPING, NAOC, and NNPC, amongst others.

Prior to the assignment of the lease to Aiteo, Shell as the operator of OML 29 published an Information Memorandum in October 2013 wherein it invited bids from interested entities for the acquisition of their joint undivided 45 per cent participating interest in OML 29.

The plaintiff claimed it did not only join others to bid for OML 29 but emerged successful.

“As consideration for the agreement, the plaintiff made the following respective payments of; $220million as deposit pending the negotiation, completion and execution of the transaction documents and relevant agreements and the balance of 2,130,000,000 upon the execution of the transaction and acquisition documents and the agreement,” it stated.

The firm further averred that based on the agreement for assignment dated October 17, 2014, Shell in conjunction with TEPING and NOAC as Assignors transferred to it their entire participating interest in OML 29 and in the process purportedly also transferred their participating interest in the wells, “when they knew or ought to have known that they had surrendered and given the wells to the NNPC/ the federal government about five years earlier for valuable consideration”.

While Aiteo claimed its bid for the acquisition of OML 29 was based upon a complete reliance on the representations in the electronic data room information, IM and the Agreement, particularly as they concern the wells contained within OML 29, it noted that issues came up in 2020 when it wanted to commence work on the assigned wells.

According to the suit, Aiteo said it later found that the wells had been earlier, re-conveyed by the defendant to the NNPC on or about 2009.

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For More Enquiry: 08052442020

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