Equinor Says It Wins Nigeria Case Over Agbami Oil Profits
(Bloomberg) -- Equinor ASA said the Nigerian Supreme Court overturned a ruling that had threatened to divert 1.5% of the company’s profits from one of the country’s largest oil fields to a former consultant.
The Supreme Court decision Friday that the lower court had no jurisdiction over the case should conclude a dispute that has played out in the West African nation for more than a decade, Equinor spokesman Erik Haaland said. “We are pleased with the court’s decision, which is in line with our position,” he said in an emailed statement.
John Abebe, the former consultant who sued the Norwegian oil producer, is also on trial in a separate case where he stands accused of forging documents submitted as evidence during his original claim, according to a statement on the website of Nigeria’s anti-graft agency.
The judgment removes the risk to Equinor of losing a portion of proceeds from the company’s 20.2% interest in the Agbami oil field, which is located about 70 miles from the Nigerian coast. The deepwater acreage currently produces about 130,000 barrels per day.
Haaland said the Supreme Court voided a ruling issued in 2010 that found Equinor inherited BP Plc’s commitments in Nigeria when the latter company exited Africa’s largest crude producer in the late 1990s, ending a commercial partnership between the two firms. Among the transferred obligations was a contract between BP and Abebe entitling the businessman to 1.5% of profits once the oil giant’s Nigerian offshore assets started producing, a federal judge ruled 11 years ago. An appeal court dismissed Equinor’s previous attempt to cancel the decision in 2012.
“It’s a tough decision,” Abebe’s lawyer, Uche Nwokedi, said by text message. “We will study it when we get a copy of the judgment and decide on our next course of action.”
BP retained Abebe in the early 1990s to assist the company’s re-entry to Nigeria more than a decade after the government had nationalized its assets. Equinor, which is controlled by the Norwegian state, made its first foray into the country alongside the U.K. oil major as part of a “strategic alliance”.
Abebe signed an agreement with BP concerning future production profits in 1993. The consultant asserted an “understanding” existed that Equinor “would automatically endorse” the arrangement and sign its own matching deal, the federal court ruling said. Equinor said it struck a different kind of contract with Abebe and wasn’t bound by BP’s agreement.
Abebe is a brother-in-law of former President Olusegun Obasanjo, who led Nigeria from 1976 to 1979 and 1999 to 2007.
Nigeria’s Economic and Financial Crimes Commission charged Abebe with forgery in 2018 for allegedly modifying a letter BP sent him 25 years ago and using the “fabricated evidence” in his lawsuit against Equinor, according to the agency‘s website.
Abebe has pleaded not guilty and the trial will resume this month, Nwokedi said.
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