LAGOS, Nigeria (VOICE OF NAIJA)-The Nigerian National Petroleum Company Limited (NNPC) has requested the High Court of the Federal Capital Territory in Abuja to discontinue its ongoing legal action against several subsidiaries of Mobil Nigeria and the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).
On June 11, 2024, NNPC, through their legal counsel Afe Babalola & Co., filed a motion requesting the court’s permission to discontinue and strike out the lawsuit, with an option to relist it if the settlement process does not succeed.
NNPC explained in the motion that this application is part of a larger effort to finalize a settlement agreement for the divestment of 100 percent interest in Mobil Producing Nigeria Unlimited to Seplat Energy Offshore Limited.
The motion stated that one of the conditions of the settlement agreement requires NNPC to withdraw the lawsuit to facilitate the settlement process.
NNPC’s counsel argued that discontinuing the case serves the interest of justice by promoting an efficient resolution without prolonged litigation.
The motion also requests the court to strike out the suit without costs, underscoring the parties’ commitment to an amicable settlement.
The agreement contains clauses aimed at aligning the interests of all parties involved and completing the transaction.
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In an affidavit sworn by Isaika Popoola, a litigation manager at Afe Babalola & Co., he outlined the case’s background, the arbitration proceedings, and the terms stipulated in the settlement agreement.
Popoola highlighted that multiple meetings had taken place among the parties to address the conflict regarding the divestment of MPNU shares to Seplat.
Following its filing on July 5, 2022, the initial lawsuit was referred to arbitration by the court on August 3, 2022.
Recent negotiations resulted in an agreement to resolve the dispute outside of court.
The motion acknowledges the court’s role in promoting dispute resolution through arbitration, conciliation, and mediation, aligning with Order 19 Rule 1 of the High Court’s rules.
NNPC emphasized that discontinuing the case is crucial to finalize the settlement process and affirmed that the application adheres to Order 24 of the High Court of the Federal Capital Territory Civil Procedure Rules 2018.
Furthermore, the motion clarified that if the out-of-court settlement fails, relisting the discontinued suit ensures NNPC retains the option to pursue judicial recourse.
“The applicant humbly urges Your Lordship to grant leave to discontinue this suit and consequently strike it off the court’s cause list.
“Granting this application aligns with the policy of this Honourable Court and facilitates the finalisation of the settlement process.” the motion stated.
The report confirmed that NNPC had signed a settlement agreement with ExxonMobil’s Nigerian subsidiaries regarding the divestment of a 100 percent interest in Mobil Producing Nigeria Unlimited to Seplat Energy Offshore Limited.
This development followed President Bola Tinubu’s intervention in the dispute.
Minister of State for Petroleum Resources (Oil) Heineken Lokpobiri recently stated that Nigeria had lost about $30 billion over the past two and a half years due to the unsuccessful divestment.
He expressed concern that Nigeria was losing about 480,000 barrels of crude oil per day due to the Seplat/ExxonMobil crisis, noting that the asset was producing about 600,000 barrels per day until the crisis began in 2022, causing the nation to lose millions of dollars daily.
Earlier reports indicated that in 2022, ExxonMobil and Seplat Energy announced a $1.6 billion sales agreement for Seplat to purchase ExxonMobil’s shares in the NNPC.
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However, a letter from the Nigerian Upstream Petroleum Regulatory Commission to ExxonMobil, dated May 16, 2022, stated that the deal could not proceed because NNPC had exercised its right of first refusal on the assets.
The right of pre-emption allows parties in a joint venture to have the first opportunity to purchase assets if the other party decides to sell or transfer them.
NNPC opposed ExxonMobil’s sale of equity to Seplat, asserting its right of first refusal. Subsequently, NNPC reportedly made an offer exceeding $1.6 billion to ExxonMobil.
After about two years of litigation, recent developments suggest an end to the crisis is in sight.