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Tag: Chevron

  • Supreme Court fixes Jan 29 for judgment in Chevron, Britannia-U dispute

    Supreme Court fixes Jan 29 for judgment in Chevron, Britannia-U dispute

    The Supreme Court has fixed judgment for January 29 in the suit involving oil giant Chevron Nigeria, Britania-U Nigeria Ltd and Seplat Petroleum Development Company on the disputed sale of three oil blocks – Oil Mining Leases (OMLs) 52, 53 and 55.

    The dispute followed Chevron’s alleged refusal to transfer ownership of the oil blocks to Britannia-U, which claimed it out-bid other firms.

    The court chose the date for judgment after parties adopted their final written arguments last week.

    Counsel to the appellant (Britania-U) Rickey Tarfa (SAN), while adopting his client’s brief, noted that the appeal was in respect of the June 20, 2014 judgment of the Court of Appeal, which vacated the order of the Federal High Court in Abuja that parties should maintain the status quo regarding issues relating to the oil blocks.

    The Federal High Court in Abuja, on December 13, 2013, issued an interim injunction restraining Chevron from assigning OMLs 52, 53 and 55 to any of the unsuccessful bidding companies, including Seplat, in the bid won by Britannia-U in September, 2013.

    Tarfa urged the court to grant the motion for mandatory restorative order to revert parties to status quo before the appeal was lodged.

    He urged the court to uphold Britannia-U’s appeal, set aside the decision of the Appeal Court and dismiss the preliminary objections of Chevron and other respondents.

    Counsel to Seplat Damian Dodo (SAN) urged the court to dismiss the appeal, which he said was interlocutory.

    Dodo argued that the core issue raised in the Brittania-U appeal was whether or not the lower court was right to set aside the ex-parte order, which extended the interim injunction granted in favour of the appellant indefinitely when the substantive case was still pending.

    Uche Nwokedi (SAN), who represented Chevron and BNP Paribas Securities Corp (second and fourth respondents), adopted his respondent’s reply to the brief with his notice of preliminary objection to the appeal, which he said, was filed the same day with the reply to the brief.

    Counsel to Chevron USA Inc and Hermant Patel (third and fifth respondents) A.V. Etuwewe, told the court that his clients filed their reply on March 3, but deemed properly filed on March 23.

    Tarfa said the respondents’ game plan was to forestall the case so that they could use technicality to knock it off.

    He told the court that the respondents failed to realise that in the case, the 14 days did not apply because the statutes “say if you sue foreigners outside jurisdiction, they must be given 30 days before they can be compelled to appear before the court.”

    Tarfa added: “When the case resumed at the trial court, after the grant of ex-parte injunction, the respondents brought an objection that the court has no jurisdiction.

    “So we argued that in view of the objection that the court has no jurisdiction, what is the position then because the res must be preserved while the issue of jurisdiction is yet to be determined.

    “This was the reason the court made the preservative order over the res while fixing the preliminary objection for hearing on the first opportunity.”

    He urged the court not to allow respondents take undue advantage of the delay they engineered.

    Britannia-U is challenging the award of OMLs 52, 53 and 55 by Chevron Nigeria Ltd to Seplat Petroleum Development Company Ltd.

    Joined as defendants also are Chevron USA Inc, BNP Parbas Securities Corp, Hermant Petel and Seplat Petroleum Development Company Ltd.

    Britannia-U Nigeria Ltd sought a declaration that its final binding offer of $1,015,000,000 for acquisition of 40 per cent interest of Chevron Nigeria in oil mining leases 52, 53 and 56 was accepted by the first defendant.

    In its statement of claim, Britannia-U said the second defendant (Chevron USA) requested it to provide “firm board commitment letter” by its (plaintiff’s) bankers for the  balance of $765million, which it complied with.

    The plaintiff added that its bankers paid the money to the second defendant (Chevron Corp) at its Houston office on November 15, 2013, arguing that with the payment, the parties had entered into a binding contract for the acquisition of OMLs 52, 53 and 55 by the plaintiff.

    Britannia-U urged the court to hold that its revised bid of $1,015, 000, 000 for acquisition of the 40 per cent interest of Chevron Nigeria Ltd in Oil Mining Leases 52, 53 and 56 is binding and subsisting.

    The plaintiff also urged the court to hold that the Irrevocable Standby Letter of Credit for $250 million representing 15 per cent of the company’s initial bid price of $1.667 billion, opened in favour of the first/second defendants on September 30, 2013, remained in force.

    The plaintiff maintained that by the irrevocable Letter of Credit, which formed part of the conditions laid down by first/second defendants and  for a binding bid, the SBLC was still being held by the first/second defendants Chevron Nigeria/(Chevron Corporation) to date.

    Britannia-U sought an order declaring that the first to fourth defendants had no right to proceed to invite bids, offer or accept, negotiate, purport or so represent or engage in any transaction or contract to transfer, sell, farm out or otherwise deal in, dispose of charge encumber, or divest the 40 per cent interest of Chevron Nigeria Ltd in Oil Mining Leases 52, 53 and 55 in Nigeria in favour of any other person or entity in disregard of the agreement between the plaintiff and the first defendant.

  • Chevron workers protest ‘inconclusive’ contract

    Chevron workers protest ‘inconclusive’ contract

    Contract workers at Chevron Nigeria Limited (CNL) have threatened to continue their strike until the company pays their end of contract benefits and resolve other issues.

    The workers have been on intermittent strikes since June 25.

    They staged a peaceful protest yesterday outside the company’s premises on Chevron Drive, Lekki-Epe Expressway, Lagos.

    Secretary-General of Chevron Contract Branch of the National Union of Petroleum and Natural Gas Workers (NUPENG), Mr Segun Odukoya, said trouble started in 2012 when the Chevron stopped their contract with six big companies.

    The union leader explained that under the arrangement, they enjoyed allowances for rent, medicals, children’s education, besides their monthly salaries.

    Some of the workers, he said, earned up to N650,000.

    Odukoya said the workers were re-employed by 16 smaller companies under a new contract that excluded the former benefits.

    According to him, this resulted in a pay slash between N130,000 and N200,000.

    Odukoya regretted that the new contract does not consider the number of years they had worked with the oil company.

    The union leader said the workers were agitating for the company to pay their benefits under the old contract.

    Also, NUPENG’s Senior Assistant General Secretary for Lagos Zone Comrade Christopher Akpede said the “inconclusive contract” was giving the workers serious concerns.

    He said the dispute compelled the union, Chevron and the contract company to meet with officials of the Federal Ministry of Labour in Abuja.

    The union leader accused Chevron of failing to abide by the resolution of the meeting.

  • Weak oil prices hurt Exxon Mobil, Chevron results

    Plunging crude oil prices weighed on quarterly earnings at the world’s biggest oil company.

    Exxon Mobil reported it earned $4.2bn (£2.68bn) in the second quarter, which marked a drop of more than 50 percent from last year.

    Profits increased in the company’s chemical unit during the period, but that was not enough to offset the oil price drop.

    Since last year, Brent crude oil prices have fallen more than 40 percent.

    “Our quarterly results reflect the disparate impacts of the current commodity price environment, but also demonstrate the strength of our sound operations, superior project execution capabilities, as well as continued discipline in capital and expense management,” said Rex Tillerson, Exxon Mobil’s chairman and chief executive officer. The massive drop in crude oil prices also weighed on results at oil producer, Chevron.

    Second quarter profit fell 90 percent from last year, to $571m (£365m).

    “Second quarter financial results were weak, reflecting a crude price decline of nearly 50 percent from a year ago,” Chevron chief executive officer, John Watson, said.

    “Our upstream businesses were particularly hard hit, as lower prices reduced revenues and triggered impairments and other charges,” Mr Watson added. “Downstream operations continued to deliver strong financial performance, reflecting both high reliability and improved margin.”

    Oil giant Royal Dutch Shell announced yesterday it has shed 6,500 jobs as part of cost-cutting plans as it seeks to counter falling oil prices.

  • Chevron’s Adebawo bags award

    The Communications Manager of Chevron Nigeria Limited, Mr. Sola Adebawo, has won the Emerging African Leaders Pinnacle Award.

    Speaking at the presentation in Ikeja, Lagos, the Chief Executive Officer/Founder, Emerging African Leaders Academy, Stephanie Afolabi said the group honoured Adebawo for his “impeccable achievements towards the development of Africa as a people and continent”.

    She added that the award was aimed at inspiring and training African youths and emerging African leaders in programmes that promote the values of integrity, and entrepreneurial spirit.

    “This is a Pan-African initiative to discover and showcase some of our shining stars on the continent. Our emphasis is on leadership because we have realised that Africa can only fulfil its potentials if we are able to build effective leaders. We have come to understand that leadership can only be developed by strengthening the connection between, and alignment of the efforts of individual leaders and the systems through which they influence organisational and social operations.

    “He is a mentor and inspiration to many young people. We also monitored his activities on social media and identified him as someone many young people can learn from. It was for this reason that he was also slated to be one of the guest speakers at the award ceremony, she said.

    Adebawo thanked the organisers for the recognition. He  harped on Chevron’s commitment to the values of integrity, trust, partnership and high performance among others.

    On “Impact of oil and gas on livelihood in Africa,” he gave an insight into the contributions and impact of the oil and gas industry on the African Economy.

    He said listed the opportunities the industry have provided Africa, urging the youth to take advantage of these opportunities to develop themselves and the continent at large.

    He highlighted Chevron’s social investments in Nigeria in education, health and economic development.

    He noted the importance of the Global Memorandum of Understanding (GMoU) process in promoting sustainable development communities around its areas of operation. The GMoU, he said, was designed to create participatory development processes to address needs of the communities.

    According to him, the GMoU has not only cultivated transparency and accountability into the governance of projects and programmes by encouraging stakeholders to operate within designed frameworks, it has also given community leaders the platform to enhance their visibility.

  • Chevron to divest from OMLs 86, 88

    Chevron Nigeria Limited has started the process of divesting its 40 per cent interests in oil mining leases (OMLs) 86 and 88, located in shallow waters of the Niger Delta Basin.

    The American oil giant, it was learnt, has invited some Nigerian oil and gas firms to offer bids for its stakes in the oil blocks. OML 86 contains the Apoi fields; the largest being North Apoi with producing capacity of 3,500 barrels of oil per day (bopd).

    According to Africa Oil+Gas Report, OML 86 also holds Funiwa with 1,300 bopd, Sengana and Okubie fields. One recent discovery – Buko, straddles Shell Nigeria operated oil prospecting licence (OPL) 286 and is either on trend with, or even on the same structure as the HB field in OPL 286. OML 88 holds the Pennington and the Middleton fields, as well as the undeveloped condensate discovery, Chioma field, it added.

    On completion of the sale, Chevron would have sold off all the legacy shallow water assets it inherited when it purchased Texaco in 1999. Between 2013 and 2015, Chevron sold its stakes in five acreages, two of them, OMLs 83 and 85, being former Texaco Nigeria assets. Chevron’s largest producing asset in Nigeria, Agbami, is from that turn- of –the- century merger with Texaco; this deepwater field alone produces 250,000 bopd, about half of Chevron’s total operated crude oil production in Nigeria.

    Seplat Petroleum Development Company Plc recently acquired 40 per cent working interest in oil mining lease (OML) 53, onshore north eastern Niger Delta from Chevron Nigeria Limited. Seplat also acquired 56.25 per cent of the share capital of Belemaoil Producing Limited, a Nigerian special purpose vehicle that has 40 per cent interest in OML 55, located in the swamp of south eastern Niger Delta, previously held by Chevron Nigeria Limited.

  • Supreme Court bars Chevron, Seplat from selling disputed oil blocks

    Supreme Court bars Chevron, Seplat from selling disputed oil blocks

    The Supreme Court yesterday ordered Chevron not to take any step or action regarding the sale of the oil mining lease (OMLs) 52, OML 53 and OML 55 – to Seplat Petroleum Development Company pending the determination of an appeal by Britannia-U Nigeria Limited.

    Brittania-U Limited’s appeal is against an earlier ruling by the Appeal Court, Abuja, which vacated an order of interlocutory injunction by a High Court, restraining Chevron and Seplat from proceeding to conclude any deal on the two oil leases.

    A five-man bench, led by Justice Tanko Muhammad issued the order, directing parties in the case to maintain the status quo. He said: “No party is allowed to take any step that will affect the res (subject matter) of the appeal.”

    The court’s order was informed by the refusal of lawyers representing parties to give undertaking that their clients would not take steps that would affect the case.

    Appellant’s lawyer, Rickey Tarfa (SAN), had urged the court to order parties not to take further steps  on the subject of the case on realising that he would be unable to argue his application for mandatory injunction seeking to reverse steps taken by Chevron to sell the disputed oil bloc to Seplat.

    Tarfa reminded the court that it had, during last hearing date of March 24 this year, fixed yesterday, May 18, for hearing of his application for mandatory injunction.

    Seplat’s lawyer, Damian Dodo (SAN), though did not object to Tarfa’s position, but noted that the substantive appeal was ripe for hearing, urging the court to hear the main appeal rather than dissipating energy in first hearing an interlocutory application.

    Lawyer to Chevron Nigeria and BNP Paribas Securities Corp, Uche Nwokedi (SAN) and lawyer to Chevron U.S.A Inc, Hermant Patel argued in similar vein, following which the apex court ordered parties to maintain status quo pending the outcome of the appeal, which hearing it adjourned to October 6 this year.

    Crisis started when Chevron offered for sale OMLs 52, 53 and 55 and invited bids from firms. The sale of the assets became controversial after Chevron, in a bid to ensure transparency put the assets through a public bidding, failed to make a public announcement of a winner, a reserve bidder and unsuccessful bids.

    It, then, allegedly turned its back on the highest bidder, Brittania-U Nigeria Limited, and began to deal with Seplat behind the scene. Brittania-U went to court to contest Chevron’s action of not declaring it winner after it posted a $1.67 billion bid for the three assets, an amount later revised to $1.015 billion after both companies’ officials met in Houston, United States.

  • Supreme Court warns Chevron against handover of OMLs 53, 55

    Supreme Court warns Chevron against handover of OMLs 53, 55

    The  Supreme  Court  sitting in  Abuja yesterday, warned oil producing giant, Chevron Nigeria Limited (CNL), that its proposed handover of  oil mining lease (OML) 53 and 55 slated for April 1-6, this year would be at its own peril.

    This follows the inability of the apex court to continue proceeding with the main appeal of the case before it involving Brittania-U and  CNL, slated for  yesterday, because of  intervening developments after the matter was adjourned in February 24 this year.

    The appellant’s counsel informed the court that they were  compelled to file a motion for a mandatory restorative order to reverse  overreaching  steps  allegedly  taken by  Chevron and Seplat aimed at getting the  Minister of Petroleum Resources  to  consent  to the  divestment  of  CNL’s  interest in OML 53 and 55, despite  the appeal that was pending in court and the  motion  for  interlocutory  injunction pending  that appeal in respect of acquisition of  the three  assets by Brittania U.

    When the case was called, counsel to all the  parties were   in court. Rickey Tarfa, a Senior Advocate of Nigeria (SAN), Abiodun Owonikoko (SAN) and  six  other  junior  lawyers  represented  the appellant while D.D.Dodo (SAN) appeared  for Seplat Petroleum  which is the  first respondent and Uche Nwokedi (SAN) appeared  for  Chevron Nigeria  and US parent company, the  second respondent and the  fourth respondent. A.V. Etuwewe represented the third and fifth respondents.

    Dodo informed  the   court  that they had a motion to amend  their respondents’  brief while  A.V. Etuwewe applied  for extension of  time to regularise  his  own respondent  brief.

    The  two  motions were granted unopposed but a cost of  N50,000 was awarded  against  the third and  fifth  respondents  in favour of the appellant.

    The  appellant thereafter  informed  the court of   their latest  motion filed  on   March 19, this year,  asking  the court  to invoke  its  disciplinary jurisdiction to  reverse  certain   actions taken  by  Seplat  and  Chevron to  overreach  the subject  matter of the appeal before  the court.

    The appellant has four prayers, which reads:

    A mandatory/restorative order setting aside the 1st respondent’s written request dated July 30, last year to the Minister of Petroleum Resources for its statutory consent validating transaction in the divestment of the Oil Mining Leases 52, 53 and 55 by the 2nd Respondent to the 1st Respondent.

  • Seplat invests $391.6m in two oil blocks from Chevron

    Nigeria’s indigenous oil exploration and production company, Seplat Petroleum Development Company Plc, has acquired 40 per cent working interest, and another 56.25 per cent stake in two oil mining leases, (OML) 53 and 55  at a cost of $391.6 million.

    Seplat said it acqqured OML 53 located onshore Northeastern Niger Delta from Chevron Nigeria Limited, as well as  56.25 per cent of the share capital of Belema Oil Producing Limited, a Nigerian Special Purpose vehicle that has 40 per cent interest in OML 55, located in the swamp of South eastern Niger Delta, previously held by Chevron Nigeria Limited.

    The firm said in a statement yesterday, that with the acquisition, it’s effective working interest in OML 55 is 22.50 per cent, while the Nigerian National Petroleum Corporation (NNPC) holds the remaining 60 per cent in the two assets.

    Seplat  said the up-front acquisition cost of OML 53 to Seplat, after adjustments, is $259.4 million, out of which $69 million was deposited in 2013 and the balance of $190.4 million was paid   at completion.

    It explained that the adjustments to the up-front acquisition cost include a deferred payment of $18.75 million contingent on oil prices averaging $90 per barrel (bbl) or above for the 12 consecutive months over the next five years.

    The firm said its estimate of  net recoverable hydrocarbon volumes attributable to its 40 per cent working interest, to be approximately 51 million barrels of oil and condensate, and 611 billion standard cubic feet (Bscf) of gas, totaling 151 million barrels of oil equivalent (MMboe).

    Seplat said following the development, it has been designated as Operator of OML 53 pursuant to the Joint Operating Model approved by the Minister of Petroleum Resources, adding that the consideration for the 22.50 per cent interest in OML 55 is $132.2 million after allowing for adjustments.

    The adjustments to the consideration include a deferred payment of $11.6 million net to Seplat contingent on oil prices averaging $90/bbl, or above for 12 consecutive months over the next five years.

    The company has also advanced $80 million credit to the other shareholders of Belemaoil to meet their share of investments and  associated costs with Belemaoil.

    In addition, discussions are underway to determine repayment terms for the initial deposit against the acquisition of $52.5 million that Belemaoil funded with bank debt.

    This amount may subsequently be added to the total amount loaned to Belemaoil by Seplat.

    Under the agreed terms, Seplat will recover the loaned amounts, together with an uplift premium of up to $20.6 million, and an annual interest of 10 per cent, from 80 per cent of the other shareholders’ oil lifting entitlements.

    Seplat’s estimates net recoverable hydrocarbon volumes attributable to its 22.50 per cent interest to be approximately 20million barrels of oil and condensate and 156 Bscf of gas (total 46 MMboe).

    The current gross production at OML 55 is approximately 8,000 bpd (1,800 bopd on a 22.50 per cent working interest basis). The deal is pursuant to the Joint Operating Model approved by the Minister of Petroleum Resources.

  • Chevron inaugurates women facility for Ekpan community in Delta

    As part of its corporate social responsibility to its host communities, the management of Chevron Nigeria Limited, CNL, operators of the NNPC/Chevron Joint Ventures, last weekend inaugurated the Ekpan Women Development Centre in Uvwie Local Government Area of Delta State.

    The facility was constructed under CNL’s Project Specific Agreement (PSA) with the Urhobo host community and is aimed at sustainable development of the host community through its women folks.

    The Secretary to the Delta State Government, Mr Ovouzorie Macaulay, who was a special guest at the occasion, described the centre as an edifice that would be a money-spinner for the community and urged the people to put it to the best use.

    Macaulay, who was represented by Mr Vincent Omorie, described the ceremony as a dream come through for the people, urging them to “own the project; it can also be put into other commercial purposes. It should be driven to enviable height.

    He assured that the government would continue to intervene on behalf of the community and other host communities in the state.

    Earlier in his remark, the General Manager, Policy, Government and Public Affairs (PGPA), Chevron Nigeria Limited, Mr. Deji Haastrup, said NNPC/Chevron Joint Venture believes very strongly in partnership and is resolutely committed to enhancing partnership with relevant stakeholders to achieve the goal of sustainable development of communities around its areas of operations.

    Haastrup, who was represented at the occasion by Mr Trust Inimgba, said, “This achievement is a testimony to the company’s Tradition of Care for communities around its areas of operations and the value it places on women development as bedrock of the development of any society. I salute the Chairman and Members of the PSA Board, and members of the Project Review Committee for their commitment and selfless service.”

    While noting that NNPC/Chevron Joint Venture had continued to contribute to adding value to the lives of people around them, the Chevron’s PGPA GM encouraged the Ekpan people to put the facility to good use and maintain it for the benefit of the community.

    In the same vein, Mr. Haastrup commended the Delta State Government for the continued support, which he said facilitated the successful completion of the project and also the Ekpan traditional and community leaders for their commitment and support in actualizing the objective of the PSA.

    He added that without their support and cooperation, it would not have realized its mutual dream of providing the facility for the use of the women.

    He specifically thanked the Secretary to the Delta State Government, Comrade Ovouzorie Macaulay, who he said has shown high visibility throughout the planning and implementation of the project.

    Speaking on behalf of the beneficiary community, Mr Godwin Omasibro, Chairman of Ekpan Development Committee, commended the management of the American oil firm for judiciously and sincerely funding the project, which he described as “a befitting gift for developing the women of the community.

    “We sincerely cherish the commitment of the company to our wellbeing and socio-economic development and we promise to ensure that the centre being handed over to us today lives up to its primary objective of facilitating sustainable development of Ekpan community.”

  • Oil spill: Reps urge Chevron, communities to settle

    Oil spill: Reps urge Chevron, communities to settle

    The House of Representatives Committee on Environment’s Gas sub-committee yesterday enjoined Chevron Nigeria Limited and Bateren, Deghele and Benikrukru communities in Delta State, which were affected by oil spills, to reach a peaceful settlement on the issue.

    The spills occurred on August 15, 2008 and April 14, last year at Chevron’s Abiteye- Escravos pipeline and affected the communities.

    Hon. Alphosus  Irona Gerrald, Chairman of the sub Committee, who is also the Deputy Chairman House Committee on Gas gave the two parties ten days to turn in a report on the result of the peaceful interaction.

    The spills have been a source of contention between Chevron, the communities and National Oil Spill Detection and Response Agency, NOSDRA as Chevron had rejected NOSDRA’s assessment report on the spills, as well as that of the aggrieved communities.

    While the communities are asking for N6.7 billion for the two spills and NOSDRA recommended N7billion, Chevron said it would pay N30 million.

    According to a report presented for NOSDRA by Olubunmi Akindele, Chevron’s damage valuation of N30million was inaccurate and would be ineffective at resolving the ecological problems brought about by the oil spills in the affected communities.

    But the subcommittee chairman, who disagreed with Chevron’s position on NOSDRA’s report, also enjoined the communities not to take an irreversible position on the issue.

    He said:  “Inasmuch as Chevron is not at liberty to reject whatever NOSDRA recommends based on assessment of damages to ecology of communities which is in line with the Act establishing it by which a culprit must abide, the claim agents who are the representatives of impacted communities should also not make their claims binding as the basis upon which the committee must reach its conclusion.”

    The lawmaker said because of the disparities in the figures generated by different consultants engaged by both Chevron and the communities as well as NOSDRA, “it is difficult for the committee to rule based on the position espoused by any of the parties without showing bias.”