Obasanjo’s In-law Floors Statoil Over Agbami Oil Field

Mon Dec, 06 2010

An in-law of former President Olusegun Obasanjo, John Abebe and his company, Inducon Nigeria Limited on Monday secured a major legal victory against a Nigerian-based Norwegian oil firm, Statoil Nigeria Limited over the Agbami oil field.

A Federal High Court in Lagos held that Abebe and his company are entitled to 1.5per cent net profit interest and accruable income of the oil firm on the Agbami Oil field.

The court, presided over by Justice Charles Archibong, held that there was an agreement between Abebe and British Petroleum (BP), which later entered into alliance with Statoil.

Abebe had filed the suit complaining of breach of contractual agreement against Statoil, stressing that the oil firm reneged on its promise to pay him 1.5 percent of its income on the Agbami oil field, which was about $25 million (USD).

Justice Archibong, in a judgement on the dispute, held that it was clear that there were short- term, intermediate- term and long- term remunerations in connection with the contractual agreement, resulting to the ceding of the 1.5 percent of the oil bloc to the plaintiff (Abebe).

This commitment with the oil firm, the judge held was not terminated or abandoned with the plaintiff, even though that Statoil later resisted it after its entrance into the Nigerian economy.

In resolving the question of whether there is enforceable agreement in law between the plaintiffs and the defendant, the court held that though it appears that there was no written agreement, BP and by extension, Statoil engaged the plaintiff as partner and thereby took up the commitment of BP to the defendant.

The court further directed the Nigeria National Petroleum Corporation (NNPC), the Nigerian Customs, Federal Inland Revenue Service (FIRS), Department of Petroleum Resources (DPR) and the Ministry of Petroleum Resources to ensure the continuity of the 50 percent equity agreement reached by the parties.

Besides, the court appointed the firm of J.K Randle to audit the accounts of Statoil to determine its income and make a report back to the court at a date to be agreed on in February, 2011.

The auditing of the account is to be supervised by the Chief Registrar of the court, while the auditor would receive the sum of N150 million for it service.

The court, however, ruled that another reputable auditing firm may be appointed to do the job should J.K Randle declined to do it.

The court also maintained its injunction restraining Statoil from either transferring or repatriating its proceeds from the Agbami oil field pending the duration of which the full accomplishment of the text of the judgment.

Justice Archibong further awarded the sum of N500,000 as cost against the defendant and adjourned further hearing on the matter till the duration when the accounts are fully audited.

According to the matter, Abebe averred that the British Petroleum approached him sometime in April 1990, and expressed it interest in the opportunities in the Nigerian oil industry together with its partner, Statoil of Stavanger, Norway, with whom it had entered into alliance agreement.

The plaintiff (Abebe) added that he successfully secured the licenses for OPL 213, 217 and 218 respectively for the respondent.

Abebe stressed that the respondent refused to sign and give effect to the net profit interest agreement in order to frustrate him from receiving accruable income from the production of the company, which he facilitated through hardwork.

The plaintiff further averred that the defendant deliberately refused to pay him the net profit interest which is in the region of $25 million.

Abebe and Inducon, among other things, therefore urged the court to declare that they are entitled to a net profit interest of 1.5 percent out of the defendant’s interest in the Agbami oil field in consideration of the business development successes it achieved for the defendant.

But statoil in its defence, described Abebe’s claims as unfounded, adding he and his company were retained by Statoil in Nigeria throughout most of 1990s and that the contract had long been terminated.

It stated that the role of Abebe was to offer advice and assistance in connection with Statoil’s business in Nigeria and that for a period, he had a seat on the board of Statoil’s Nigerian subsidiary until the alliance it had with British Petroleum (BP) was dissolved in 1999.

Statoil wondered if there was actually an oral agreement as claimed by Abebe, why did he not use his position as the vice chairman of the oil firm from 1991 to 1997 to regularise it, stating that from the plaintiffs’ own evidence, there was no conceivable evidence to show that there was an agreement between them.

The court had, during trial, ordered Statoil to ensure that all proceeds accruing to it from the 18.5 per cent interest in the Agbami oil field operated by ChevronTexaco and located in concession acreages of OML 127 and OML 128, OML 129 and OPL 315 remain within Nigeria and not repatriated outside the shores of the country pending the final determination of the suit.

Justice Archibong had also ordered that notice of the order be served on the Ministries of Petroleum and Finance, Nigeria Customs Service, Federal Inland Revenue Service (FIRS) and the Central Bank of Nigeria (CBN) for them to be aware order and appropriately watch.

http://www.thetimesofnigeria.com/TON/Article.aspx?id=3017

who is this John Abebe,