Supreme Court of Nigeria has delivered its judgement in favour of Seplat Petroleum Development Company Plc, and Chevron Nigeria Limited (“CNL”) in a litigation against both parties by Brittania-U Nigeria Limited that had to date prevented the full transfer to Seplat of a 40 percent working interest in OML 53 and effective 22.5 percent working interest in OML 55.
The interests, held through 56.25 percent ownership of the share capital of Belemaoil Producing Limited, it acquired from CNL in February 2015.
Seplat is a leading Nigerian indigenous oil and gas company listed on both the Nigeria Stock Exchange and London Stock Exchange.
“We are naturally very pleased with today’s ruling, not least because it means we are now free to deploy our proven operating expertise to realise the significant reserve, production and value potential these blocks hold.
“To give an idea of scale, we estimate these blocks to hold recoverable volumes of around 200 million barrels of oil equivalent to Seplat, a material volume by any standard and one which has now been unlocked for us,” said Austin Avuru, Seplat’s Chief Executive Officer.
“OML 53 fits neatly within our strategy of securing, commercialising and monetising natural gas in the Niger Delta to supply the rapidly growing domestic market and will further reinforce our position as a preeminent supplier of gas in Nigeria.
“OML 55 provides us with a number of attractive opportunities to boost oil and gas output, and is consistent with our strategy of prioritising assets that offer near-term production growth, cash-flow and reserve replacement potential in the onshore and shallow water offshore areas of Nigeria,” he added.
In Supreme Court judgment on Friday, Justice Syvester Ngwuta who read the lead judgment said the prayer brought to the apex court by the appellant, through its lawyer, Rickey Tarfa SAN lacked merit.
The lead judgment noted that the crux of the appeal is a simple matter of life span of an interim order noting that counsel to the appellant overblew the issues.
The court then adopted the five issues distilled by the appellant for determination resolving all the issues against the appellant. It noted that the appeal lacked merit and accordingly, dismissed same . In addition, a cost of 100 k each is awarded to each of respondents to be paid by the appellant.
All justices on the panel for this matter assented to the judgment and the consequential award against the appellant.
Seplat Petroleum Development Company and the other respondents are yet to respond formally to the judgment.
Recalled that in August 2013, Chevron put up three acreages, OMLs 52, 53 and 55 for sale. In putting up the bid, Chevron had announced its intention of selling the three OMLs to one preferred bidder not necessarily the highest bidder.
After the first bid round, 30 bidders emerged. Chevron made a shortlist and when the sealed bids were opened, Britannia U had bid $1.6bn which the company later revised to $1.015bn.
The Seplat consortium with a bid of $800m was declared the preferred bidder and signed SPA Nov 28, 2014. The Seplat Consortium comprised Seplat and Amni with Belema joining the consortium subsequently.
Brittania U was however insistent that Chevron should declare it bid winner and sought an injunction restraining Chevron from concluding the sale to the Seplat Consortium.
The company approached a Federal High Court sitting in Lagos which granted an interlocutory injunction and further granted an extension while the issue of jurisdiction was pending.
Following the extension of the injunction, Seplat and its consortium partners went to the Appeal court on June 20, 2014 to challenge the High court’s injunction.
The Appeal court ruled in Seplat’s favour and vacated the injunction reasoning that the life of the interim order could not be extended, while the jurisdiction of the Federal High Court was being challenged.
Not satisfied with the Appeal Court’s ruling, Brittania U went to the Supreme Court to contest the appeal.
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