Following recent agreements struck with NNPC for deep-water oil production in Nigeria, four major multinational oil corporations operating in Nigeria have decided to drop their multibillion-dollar litigation against the Nigerian National Petroleum Company Limited.
Shell Plc, ExxonMobil Corporation, Chevron Corporation, and Equinor ASA disclosed this in letters to two New York federal judges on August 22, 2022, Bloomberg reported on Wednesday.
According to the report, the oil majors claimed they had reached a settlement with the NNPC and would end any pending legal proceedings once the new agreements went into force.
The action was taken ten days after the companies extended their production-sharing agreements with the NNPC and their leases with the Nigerian government for the permits at the center of long-running disputes over crude allocation.
“Lawyers for Equinor and Chevron asked the judge to suspend the case until the end of October to allow sufficient time for the conditions to be satisfied and for the settlement agreement to become effective,” letters to two New York federal judges showed.
Once that happens, the companies “expect to withdraw this action,” the letter said. Exxon and Shell anticipate being able to do the same after 60 days, they said in a separate letter.
The IOCs had sued NNPC in 2017 in the United States court to force the national oil company to pay out $1bn in alleged overpayments on Oil Mining Lease 128 where the Agbami field was located.
Statoil and Chevron’s Nigerian branches had, in mid-March 2017, requested a federal court in New York to uphold an arbitral decision ruled in their favour in March 2015 over their dispute with NNPC.
At the time, an arbitral court based in Nigeria had asked NNPC to pay nearly $1bn to the majors to cover the excess amount it had earned when redistributing revenue from OML 128, which encloses the Agbami field (240,000 barrels per day).
The NNPC motioned an appeal to the Federal High Court in Lagos which issued a counter-ruling in May 2015 stating that Statoil had to pay $1.1bn to NNPC.
