• Report on Nigeria’s gas projects, arbitration submitted
The Legal Audit Committee on Associated Gas Development Projects and Arbitration Matters has submitted its final report to the Attorney-General of the Federation and Minister of Justice, Prince Lateef Fagbemi (SAN).
The committee warned of major legal and financial risks facing Nigeria’s gas sector due to poorly structured contracts and past arbitration missteps.
The committee chairman, a former Lagos Attorney-General and the Senior Partner at African Law Practice (ALP) NG & Co stated this in a statement signed and dated May 14.
The committee was tasked with auditing agreements and memoranda of understanding (MOUs) linked to accelerated gas development efforts.
The learned silk said the project was inaugurated in November 2024 and the committee was mandated to align existing contracts with the Nigerian Gas Master Plan and to assess the extent of commercial risk Nigeria had been exposed to in past dealings.
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Speaking during the presentation of the report at the Ministry of Justice in Abuja, Shasore explained that the report offered a comprehensive review of critical gas agreements and arbitration cases.
He emphasised the need for structured risk assessment in contracts involving international stakeholders, pointing to past lapses that had left Nigeria vulnerable in commercial disputes.
He disclosed that the panel’s investigation uncovered significant legal vulnerabilities, primarily due to uncoordinated contract drafting, weak dispute resolution mechanisms, and a general lack of structured legal risk analysis in transactions involving international stakeholders.
“Past missteps in drafting and executing contracts have resulted in Nigeria being exposed to expensive arbitration disputes. This report recommends corrective measures that will protect national interest and reduce legal and financial exposure in future engagements,” he said.
Shasore further noted that many of the past challenges stemmed from inadequate due diligence and a lack of cohesive strategy in contract negotiation and implementation.
“Our findings reveal that Nigeria has often entered into gas development agreements without fully assessing the long-term legal implications,” he stated.
Among the key recommendations of the panel is the establishment of a legal risk matrix—a preemptive tool designed to identify potential dispute triggers before contracts are signed.
The report also advocates for more robust inter-agency coordination, tighter oversight in contract approvals, and enhanced legal training for negotiators handling high-value energy deals.
Prince Fagbemi, while receiving the report, commended the committee’s work, describing it as a bold step towards building stronger legal foundations in Nigeria’s gas sector.
He said: “This audit provides us with a clear roadmap for reforming our contractual frameworks. It will guide future engagements and help avoid repeating the costly mistakes of the past. This is an important contribution to our efforts to improve Nigeria’s economic and legal resilience.”
The audit committee, made up of seasoned legal, commercial, and industry professionals, conducted the review over a six-month period.
Their work involved examining existing agreements, evaluating arbitration outcomes, and consulting relevant ministries, departments, and agencies involved in the gas sector.
The audit’s findings are expected to influence how future gas development deals are structured, particularly those involving international investors and multilateral partners.
Prince Fagbemi commended the committee’s effort, describing it as a bold step towards reinforcing Nigeria’s legal and economic resilience in the global gas sector.
“This report provides a blueprint for strengthening our contractual frameworks and will guide future engagements,” Fagbemi said.
The senior lawyer further said among the report’s key recommendations was the creation of a legal risk matrix to preempt disputes and enhance Nigeria’s bargaining power in high-stakes deals.
According to him, the project also calls for institutional reforms in contract management and dispute resolution, particularly in sectors involving substantial foreign investment.
“The committee’s work covered not only concluded arbitration cases but also examined how previous missteps had translated into significant financial liabilities for the country.
“By identifying legal and procedural gaps, the report aims to protect national interests in future arbitrations and gas development negotiations,” he said.
The committee, made up of legal and commercial experts, worked intensively over six months to produce what insiders described as a “forward-looking document.”
“The Ministry of Justice acknowledged the exemplary leadership of the Shasore (SAN) and the commitment of committee members to national service,” Fagbemi said.
