Chevron Nigeria Limited has formally handed over the producing assets in OMLs 53 and 55 to Seplat Petroleum Development Company Plc following a supreme court judgement on Friday, January 29, 2016 that delivered its judgement in favour of Seplat and Chevron Nigeria Limited (“CNL”) in a litigation brought against both parties by Brittania-U Nigeria Limited (“Brittania-U) that had to date prevented the full transfer to Seplat of a 40.00% working interest in OML 53 and effective 22.5% working interest in OML 55.
Officials of Seplat Petroleum Development Company Plc attended the handover ceremony which took place at the Lagos headquarters of Chevron Nigeria on Friday, January 29, 2016.
“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 net 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 the ruling, 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 100,000 each is awarded to each of the 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.
In August 2013, Chevron put up three acreages for sale. They were OMLs 52, 53 and 55.
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 short list and when the sealed bids were opened, Britannia U had bid $1.6 billion, which the company later revised to $1.015 billion.
The Seplat consortium, with a bid of $800 million, was declared the preferred bidder and signed SPA November 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 the 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.
On Friday, Chevron Nigeria Limited formally handed over the producing assets in OMLs 53 and 55 to Seplat Petroleum Development Company Plc based on the judgement.
Seplat has 40 per cent working interest in OML 53 and effective 22.5 per cent working interest in OML 55.
Officials of Seplat Petroleum Development Company Plc attended the handover ceremony, which took place at the Lagos headquarters of Chevron Nigeria on Friday.
