The Nigerian National Petroleum Corporation (NNPC) said yesterday that its legal team has saved about $5.4 billion in court cases through the victories it recorded in four court judgments involving the company.
The corporation has also extended the highly sought-after contracts to exchange its crude oil for imported fuel for additional six months.
A statement by the Corporation’s Group General Manager, Group Public Affairs Division, Dr. Kennie Obateru, said the favourable judgments obtained in the cases also won the national oil company’s litigation team the “Leading Case Counsel Team” of the 2020 Africa Arbitration Awards (AAA).
Obateru noted that the award was given to the NNPC team in recognition of its “stellar performance” at the 8th edition of the East African International Arbitration Conference (EAIC) which held in Nairobi, Kenya, recently, with participants joining in virtually.
NNPC listed the successful arbitration cases showcased by its legal team at the conference as the IPCO (Nigeria) Vs. NNPC’s in respect of the dispute over the Bonny export terminal project in which $367.5 million was saved after 13 years of litigation.
It also named the ESSO E&P Nigeria Limited Vs. NNPC in respect of the dispute over the interpretation of the Production Sharing Contract (PSC) covering Oil Prospecting License (OPL) 209/Oil Mining Lease (OML) 133 in which the enforcement of a $2.7 billion claim was dismissed.
Other recent arbitration cases presented at the conference, the company said, include ESSO & Others Vs. NNPC in respect of alleged breaches in interpretation and implementation of the PSC covering OPL 222/OML 138 with over $380.141 million saved.
Also mentioned by the corporation was the case between the Atlantic Energy Group vs. NPDC in respect of an allegation of wrongful termination of Strategic Alliance Agreements (STA) over eight OMLs resulting in the award of $1.6 billion in favour of NPDC.
“At the conference which was aimed at promoting commercial arbitration and showcasing African lawyers and law firms which have performed well in arbitration practice, the NNPC legal team gave a presentation on the challenges and lessons learnt from arbitrations and the successes recorded.
“Besides the presentation, the NNPC legal team’s entry for the leading case counsel team category of Africa Arbitration Award was adjudged the best amongst entries from 100 other institutions across Africa resulting in the award,” the corporation said.
It added that the award was a testimony to the commitment of the legal division and indeed the staff of the corporation to the Transparency, Accountability and Performance Excellence (TAPE) agenda of the Mallam Mele Kyari-led management of the national oil company.
NNPC Extends Oil Swap Contracts for Six Months
Meanwhile, the NNPC has extended its oil swap deals, the highly sought-after contracts to exchange crude oil for imported fuel, for another six months.
Reuters reported that the initial one-year contracts (2019/2020) to exchange more than 300,000 barrels per day (bpd) with 15 company pairings were due to expire in October.
It quoted unnamed sources as saying that the companies renegotiated the price agreement due to changes to fuel prices in Nigeria.
NNPC’s crude swap deals, known as Direct Sale-Direct Purchase Agreements (DSDP), were previously referred to as offshore crude oil processing agreements (OPAs) and crude-for-products exchange arrangements.
The contracts supply a large portion of Nigeria’s petrol, and some of its diesel and jet fuel, as it has not been profitable for private importers to bring in fuel.
The corporation had assured that the 2019/2020 DSDP programme would be executed with utmost transparency and accountability.
Before the six-month extension, the initial contract would last from October 1, 2019 to September 30, 2020.
A total of 15 groupings, with at least 34 companies in total, were successful.
According to NNPC, the shortlisted companies comprised, BP Oil International Limited/AYM Shafa Limited; Vitol SA/Calson-Hyson;
TOTSA, Total Oil Trading SA/Total Nigeria Plc; Gunvor International BV/AY Maikifi Oil and Gas Limited; Trafigura PTE Limited/AA Rano Nigeria Limited; and CEPSA SA/Oando Plc.
The other shortlisted firms are Mocoh SA/Mocoh Nigeria Limited; Litasco SA/Brittania-U Nigeria Limited/Freepoint Commodities; MRS Oil and Gas Company Limited; Sahara Energy Resource Limited, Bono Energy Limited/Eterna Plc/ Arkleen Oil and Gas Limited/Amazon Energy Resource; Matrix Energy Limited/Petratlantic Energy Limited/UTM Offshore Limited/Levene Energy Development Limited; Mercuria Energy Trading SA/ Barbedos Oil and Gas Services Limited/Rainoil Limited/Petrogas Energy; Asian Oil and Gas PTE Limited/Eyrie Energy Limited/Masters Energy and Gas Limited/Casiva Limited; and NNPC’s subsidiary trading arm, Duke Oil Company Incorporated.
Under the deals, the NNPC supplies crude oil to selected local and international oil traders and refineries in exchange for petrol and diesel.
The previous deals were signed in May 2017 to exchange about 330,000 barrels per day (bpd) of crude oil for imported petrol and diesel as part of measures to sustain the supply of petroleum products nationwide.
However, the deals, which expired by the end of July 2018, were extended until the end of 2018.
The state-run oil firm later extended the oil swap deals by another six months to June 2019.