Equinor Reports Victory Over Agbami Oil Profits

oil and gas - February 9, 2021

Equinor ASA has said the Nigerian Supreme Court overturned a ruling that had threatened to divert 1.5 per cent of the company’s profits from one of the country’s largest oil fields to a former consultant.

The Supreme Court decision 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.

Bloomberg reported that John Abebe, the former consultant who sued the Norwegian oil producer, was also on trial in a separate case where he was 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 per cent 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 per cent 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 had retained Abebe in the 90s to assist the company’s re-entry to Nigeria more than a decade after the government had nationalised 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.

Nigeria’s Economic and Financial Crimes Commission had 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, Bloomberg quoted Nwokedi as saying.

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