The Nigerian National Petroleum Company Limited, NNPCL, has applied to a High Court of the Federal Capital Territory, Abuja, to stop its ongoing legal action against several subsidiaries of Mobil Nigeria and the Nigerian Upstream Petroleum Regulatory Commission.
NNPCL in a motion, filed on June 11, 2024, by their legal counsel Afe Babalola & Co., requested the court to grant leave for discontinuance and to strike out the suit, with the provision to relist it should the settlement process fail.
NNPCL, in the motion stated that the application was part of a broader effort to finalise a settlement agreement involving the divestment of 100 per cent interest in Mobil Producing Nigeria Unlimited to Seplat Energy Offshore Limited.
As stated in the motion, one of the conditions required for the Settlement Agreement requires NNPCL to withdraw the suit to facilitate the settlement.
NNPCL’s counsel contended that the discontinuance is in the interest of justice which promotes an efficient resolution without prolonged litigation.
The motion also asks the court to strike out the suit without costs, emphasising the parties’ commitment to an amicable settlement.
The agreement includes clauses to align the interests of all parties involved and finalise the transaction.
In an affidavit deposed to by a litigation manager at Afe Babalola & Co., Isaika Popoola, he detailed the history of the case, the arbitration process, and the terms of the settlement agreement.
Popoola noted that the parties had held several meetings to resolve the dispute concerning the divestment of MPNU shares to Seplat.
The initial suit, filed on July 5, 2022, was referred to arbitration by the court on August 3, 2022.
Recent negotiations led to a decision to settle the dispute out of court.
The motion states the court’s role in encouraging dispute resolution through arbitration, conciliation, and mediation, in line with Order 19 Rule 1 of the High Court’s rules.
NNPCL noted that the discontinuance is essential to complete the settlement process and that the application complies with Order 24 of the High Court of the Federal Capital Territory Civil Procedure Rules 2018.
The motion further stated that relisting of a discontinued suit if the out-of-court settlement fails ensures that NNPCL retains the right to seek judicial recourse should the settlement not be concluded successfully.
“The applicant humbly urges Your Lordship to grant leave to discontinue this suit and consequently strike it off the court’s cause list.
“Granting this application aligns with the policy of this Honourable Court and facilitates the finalisation of the settlement process.” the motion stated.
On May 31, 2024, it was reported that Nigeria might add 480,000 barrels to its daily crude oil output as NNPCL and ExxonMobil took a step towards resolving the disagreement surrounding the sale of the latter’s asset to Seplat Energy.
The report stated that NNPCL confirmed it had signed a settlement agreement with ExxonMobil companies in Nigeria over the proposed divestment of a 100 per cent interest in Mobil Producing Nigeria Unlimited to Seplat Energy Offshore Limited.
This was after President Bola Tinubu announced his intervention in the debacle between NNPCL and ExxonMobil hindering the sale of the assets to Seplat.
The Minister of State for Petroleum Resources, (Oil), Heineken Lokpobiri, said recently that Nigeria had lost about $30bn in the past two and a half years as a result of the unsuccessful divestment.
The minister expressed concerns that Nigeria was losing about 480,000 barrels of crude oil per day due to the Seplat/ExxonMobil crisis.
He said the asset was producing about 600,000bpd until the crisis began in 2022, saying the nation was losing millions of dollars daily.
It was reported earlier that ExxonMobil and Seplat Energy had in 2022 announced a $1.6bn sales agreement deal that would see Seplat purchase ExxonMobil’s complete shares in the NNPC.
However, just when all hopes were high for the completion of the deal, a letter dated May 16, 2022, by the Nigerian Upstream Petroleum Regulatory Commission to ExxonMobil, stated that the deal could no longer hold because NNPCL had exercised its right of pre-emption first refusal on the assets.
Right of pre-emption is a legal right to parties in a joint venture to be the first to be considered for any planned sale or takeover of assets in the JVs if either party chooses to trade them off.
According to reports, NNPCL objected to the sale of ExxonMobil’s equity to Seplat and insisted on exercising its first refusal right after which the company reportedly made an offer above $1.6bn to ExxonMobil.
But after about two years of litigation, there seems to be an end in sight to the crisis.
Madukwe B. Nwabuisi is an accomplished journalist renown for his fearless reporting style and extensive expertise in the field. He is an investigative journalist, who has established himself as a kamikaze reporter.