$62bn PSC Revenue: Shell Battles FG Over Demand For $13.65bn

The Shell Nigeria Exploration and Production Company Limited (SNEPCo) has vowed to battle the Federal Government over its demand for a share of about $13.65billion in the $62billion which five international oil companies allegedly owe Nigeria following the 2018 Supreme Court’s judgment on Production Sharing Contracts (PSCs) between the country and the firms.
The other four IOCs include, Total Exploration & Production Company Limited, Nigerian Agip Oil Company (NAOC), Mobil Producing Nigeria Unlimited and Chevron Nigeria Limited.
The apex court’s verdict enabled the Federal Government to increase its share of income from the PSCs.
Shell is opposing the demand for a total of $13,651,034,052.59 by the Federal Government on the grounds that it was planning to commence arbitration proceedings in respect of the issue.
The firm, which accused the Federal Government of unilaterally making adjustments in the PSC in respect of the Oil Mining Lease 118 in enforcing the apex court’s verdict, sought a court order stopping the government from taking further action on its demand for the money until its planned arbitration is concluded.
The company filed the suit, marked FHC/ABJ/CS/154, before the Federal High Court in Abuja, in which it sought an injunction against the government.
The four other IOCs from whom the Federal Government had demanded various sums of money based on the Supreme Court’s verdict filed similar suits at the Federal High Court in Lagos.
Parts of the court documents filed by Shell were seen by our correspondent, last Saturday.
The documents indicated that the Federal Government demanded $13,651,034,052.59 from Shell, through a letter dated January 14, 2019, issued on its behalf by Trobell International Nigeria Limited.
Trobell is joined as the second respondent in the Shell’s suit, while the Nigerian National Petroleum Corporation (NNPC) is joined as the first respondent and the Attorney-General of the Federation as the third.
Shell’s suit filed through its lawyer, Ogunmuyiwa Balogun of the Olaniwun Ajayi law firm, is anchored on section 251(1)(r) of the Nigeria Constitution, section 53 of the Arbitration and Conciliation Act, Article 26(3) of the Arbitration Rules, section 11 and 13(1) of the Federal High Court Act and Order 28 Rule 1 of the Federal High Court (Civil Procedure) Rules.
But Trobell, in its response to the suit, had asked the court to dismiss the suit for lack of jurisdiction.
The firm’s preliminary objection filed through its lawyer, Oladapo Agboola was made available to newsmen, last Saturday.
It argued that the matter could not be “re-litigated” after the Supreme Court had made a pronouncement on it.
It also argued among others that the affidavit filed in support of the suit contained extraneous issues which the court could not rely on.