A Federal High Court in Abuja has set aside the purported reversal of the consent given by the Federal Government for the farm-out agreement between Chevron and Transnational Energy Limited (TEL) on the Abigborodo and Hely Creeks marginal fields in the Oil Mining Lease (OML) 49.
In a judgment by Justice Taiwo Taiwo, the court upheld the plaintiffs’ claims and granted all reliefs sought, including an award of $20 million in damages against the defendants, who are all Federal Government’s agents.
The judgment was on a suit: FHC/ABJ/CS/1067/2020, filed by TEL and Bresson A. S. Nigeria Limited. Defendants were Minister of Petroleum Resources, Minister of State, Petroleum Resources, Department of Petroleum Resources, National Petroleum Investment and Management Services (NAPIMS) and the Attorney General of the Federation.
The plaintiffs, through their lawyer, Dr. Sijuade Kayode, claimed that a farm-out agreement over the two marginal fields was concluded between TEL and the Joint Venture operators, Chevron Nigeria Limited in 2017 for amongst others purposes, to provide feedstock to a gas-to-power project developed by TEL and its partners, which started in 2012.
They stated that the Department of Petroleum Resources (DPR), in a letter dated February 20, 2017, conveyed a letter of Ministerial Consent by the Minister of Petroleum Resources approving the farm-out and its terms.
The plaintiffs added that the DPR, in its said letter, equally directed TEL to pay a prescribed premium to Federal Government, after which the farm-out will become effective, a directive TEL complied with by paying the prescribed fee of $639,820.65.
Rather than allow the plaintiffs enjoy the benefits of the agreement after the FG had acknowledge receiving TEL’s payment, then Chief of Staff to President Muhammadu Buhari, the late Abba Kyari wrote a memo, purporting to revoke the earlier ministerial consent, claiming to have actedon the instruction of the President.
They added that the DPR, without any notice to the farmee (TEL) put the two fields in the 2020 marginal fields basket, even though the fields were not part of the original 57 of fields approved for the bid round, a decision TEL and its sister company in the power business (Bresson A.S. Nigeria Limited) challenged by filing the suit.
The plaintiffs exhibited their audited accounts, business plan and financial model which showed that both plaintiffs had jointly expended US$22,718,000 on the development of the gas and power side of the project.
They also exhibited their financial models in arguing that they have lost over US$164 million due to the actions of the defendants, while Federal Government may have equally lost over US$68 million in royalty and taxes not earned as a result of the actions of the defendants.