Brittania-U heads for supreme court over Chevron’s assets

Chevron logo23 July 2014, Abuja – Brittania-U has headed to the Supreme Court to overrule the Court of Appeal’s judgement, which had ruled against the extension of the interim orders granted to Britannia-U by a Federal High Court on Chevron’s oil blocks that was put for sale last year.

The dispute in which Brittania-U is claiming specific performance or $10 billion damages for wrongful repudiation is over Oil Mining Leases (OMLs) 52, 53 and 55.

The Nigerian National Petroleum Corporation (NNPC) and the Minister of Petroleum Resources are joined in the suit against Chevron and Seplat after the Federal High Court in May decided that it had jurisdiction to hear the suit.

The Federal High Court judge also found that NNPC and the Minister were necessary parties to the law suit.

The dispute arose after U.S. oil giant, Chevron, put up its 40 per cent share of the three OML’s, part of a planned five-asset onshore divestment, for sale.

The oil major, which confirmed the auction of the three onshore blocks in June, 2013, was reportedly keen to wrap the process up quickly. After an initial invitation to 20 companies, Chevron had to open the process up to more companies as it was inundated with applications.

A preferred shortlist emerged in mid-August enabling the preferred bidders to do more in-depth due diligence and finalise their bids.

They were then expected to submit their final bids by September 30 and to pay 15 per cent of their bids as a deposit.

The three blocks are said to have total oil reserves of around 134 million barrels and five trillion cubic feet of gas, with the combined values of the three blocks being estimated currently at between US$500 million and US$600 million.

It soon became clear that trouble was brewing after conflicting rumours began to circulate of the winners.

On the one hand, Brittannia-U was said to have won with a $1.6 billion bid for all three assets. On the other hand, three companies, working in close co-operation were said to have won the bids for the three assets.

Seplat, the recently listed company that seems to do no wrong, was said to have bid for OML 53, while Amni, recently having undergone a boardroom shuffle, was said to have bid for OML 52 and Delta State-owned Belema Oil was said to have bid for OML 55, altogether putting in a reported combined bid of $900 million.

According to information gathered, Chevron notified the losers, but continued to drag its feet over declaring the winners.

Brittannia-U stated that it came to its notice that Chevron was communicating with Seplat. They went to court to ask to be declared winners of the auction after putting in the highest bid.

Brittania-U immediately secured a High Court injunction, preventing Chevron from transferring the assets to Seplat or any other bidder.

Chevron had sought to have the case thrown out for lack of jurisdiction on the basis that it was a private commercial matter and further that it should be referred to arbitration on the basis of the confidentiality agreement signed by the parties.

The court ruled that there was a triable dispute over which it had jurisdiction.

Chevron, which will no doubt prefer to see Seplat declared the winner, had appealed to the High Court against the interim injunction granted by the Federal High Court.

The Court of Appeal ruled in their favour and Britannia-U is now headed for the Supreme Court to overturn the Court of Appeal’s decision.


– Daily Newswatch

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