Home collateral Another oil lawsuit against Shell alleges fraud, deception and misrepresentation

Another oil lawsuit against Shell alleges fraud, deception and misrepresentation


… As DPR assigns the marginal field of Kugbo West in OML 29 to 7 Waves Petroleum

… Aiteo seeks more than $ 2 billion in general damages and other collateral damages

October 03 (THEWILL) – The controversy surrounding the sale of the OML 29 by Shell Petroleum Development Company of Nigeria to Aiteo Eastern Exploration and Production Company Limited in 2014 may be far from over as Aiteo once again dragged Shell ahead the courts for his allegations of “fraud, deception and misrepresentation” in the sale.

In a lawsuit, FHC / ABJ / C8 / 738/2021, dated July 27, 2021 and filed in a Federal High Court in Abuja, Aiteo accuses Shell of not having fully disclosed to him the true position of the oil wells at the time of sale, despite receipt of the full amount required for the sale.

Calling Shell’s action “fraudulent, deceptive” and “misrepresentation,” Aiteo demands, among other things, the payment of over $ 2 billion to Shell in general and other collateral damage as a result of the alleged lies and deceptions when selling it.

Shell, which sold its stake in OML 29 to Aiteo in 2014, is accused of transferring the Kugbo West and Okiori Marginal fields to the Department of Petroleum Resources without disclosing it to Aiteo during negotiations and this led when purchasing the asset.

The problems started with a letter dated September 16, 2021 and titled “2020 Marginal Field Bid Round Award Of Kugbo West Marginal Field located in OML 29 at 7 Waves Petroleum Limited”, from 7 Waves Petroleum Limited, informing Aiteo that a section of the controversial OML 29 is now owned by 7 Waves, thanks to the Oil Bid Round 2020 led by the Department of Petroleum Resources (DPR).

The letter signed by Mr. Daniel Alabi, Managing Director of 7 Waves Petroleum Limited, stated in part:

“7 Waves Petroleum Limited actively participated in the 2020 marginal field tender conducted by the Department of Petroleum Resources [DPR] and emerged as a beneficiary with a 100 percent stake in Kugbo West Marginal Field in OML 29 upon payment of the statutory signing bonus. The field would be operated jointly with our partner ‘Multiplan Nigeria Ltd’.

“Our company would be happy to discuss and engage with Aiteo Eastern Exploration and Production Company Limited as the lease holder for OML 29 with the underlying objective of executing the required affermage agreement as well ( to) enable our company to begin field development activities essential to meet the timelines set by the DPR.

“We would be happy to set up an introductory meeting to discuss next steps, please advise our company of an appropriate date and time. Thank you for your help, we hope for a mutually beneficial and lasting working relationship.

Aiteo had already received the brutal shock when DPR informed him of the new development in a letter dated August 3, 2021 and signed by Edu Inyang for the Director / CEO of DPR.

The letter titled “2020 Marginal Field Bid Round Award Of Kugbo West Marginal Field located in OML 29 at 7 Waves Petroleum Limited”, a copy of which was sighted by THEWILL, stated in part: “Please note that Kugbo West Marginal Field located at L ‘OML 29 has been awarded to 7 Waves Petroleum Limited (7 Waves) following the 2020 marginal field tender round fiscal year. The allocation was therefore communicated to 7 Waves by our letter DPR / tt86 / vol.1 / 269/98 of May 3, 2021.

“The award letter, among other things, specified that the successful bidder negotiates and concludes an affermage agreement with the holder of the oil mining lease (OML) 29 within ninety (90) days.

“Therefore, you are hereby invited to start negotiating the Kugbo Western Marginal Field Farming Agreement with 7 waves, as the company has qualified for the field award. It is expected that the negotiation will be concluded within the time period specified in paragraph 2 above.

In response to the development, Aiteo took the matter to court, accusing Shell of not informing it that part of the OML 29 had in fact been handed over to the Nigerian National Petroleum Corporation (NNPC), its joint partner for the wells. oil, in settlement of other obligations.

Apparently annoyed by the disappointments he has encountered with the entire OML 29 since its takeover from Shell in 2013/2014, Aiteo is not only asking for payment of the sum of $ 2,135,250,000 that would have been accumulated from the commercial exploration and other activities if the deal went well but also a refund of the sum of $ 46,200,000 being the payment made to Shell for the controversial part of the oil wells which has now been allocated to 7 Waves.

Efforts to get Shell’s media relations manager, Mr Bamidele Odugbesan, to comment on the latest development were unsuccessful when this report was filed on Friday, as phone calls to his phone number did not successful.

Recall that the bubble had burst for Shell when a court in the Netherlands, at the beginning of the year, had forced it to compensate two Nigerian farmers for the damage caused by the oil spills of 2004/2005. Its alleged centuries-old game of cheating and exploiting technicalities in the production and disposal of crude oil to allegedly bypass not only the federal government, but also local operators in the oil and gas sector, has also been dismantled.

And despite all the justifications and defenses, Shell has also been singled out in a messy missing crude oil scandal by the local regulator, the Department of Petroleum Resources (DPR) via an unapproved metering system, which it allegedly used to divert crude oil and bypass local operators.


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