FG sues Pan Ocean Oil Company over $49.9 million debt

The Federal Authorities has renewed its authorized battle in opposition to Pan Ocean Oil Company (Nigeria) Restricted over alleged debt totaling $49,936,088.31 in oil royalties, concession leases, and gasoline flaring penalties.

The plaintiffs within the case—comprising the Minister of Petroleum Resources, the Ministry of Petroleum Sources, and the Federal Authorities of Nigeria—filed an amended assertion of declare via Senior Advocate of Nigeria, Akin Akintoye, earlier than the Federal Excessive Courtroom in Lagos.

Based on the federal government, Pan Ocean operated Oil Mining Lease (OML) 98 beneath a three way partnership with the Nigerian Nationwide Petroleum Company (NNPC) however failed to fulfill monetary obligations as stipulated beneath the Petroleum Act.

These obligations included statutory funds corresponding to royalties, gasoline flare penalties, and concession leases.

Regardless of a number of calls for and what the federal government described as a written acknowledgment of the debt by Pan Ocean in a letter dated January 24, 2019, no fee was made.

“Pan Ocean, whereas working Oil Mining Lease (OML) 98 beneath a three way partnership with the Nigerian Nationwide Petroleum Company (NNPC), failed to fulfill its statutory obligations beneath the Petroleum Act,” the federal government said.

The federal government additional famous that this ongoing non-compliance led the Minister of Petroleum to revoke OML 98.

The plaintiffs emphasised the significance of those funds, arguing that the funds are important to nationwide growth.

“They emphasised that the case was not about asset possession or crude oil gross sales, however about obligatory statutory funds required from all leaseholders.”

Along with looking for affirmation of Pan Ocean’s legal responsibility, the federal government is asking the court docket to order the corporate to pay the $49,936,088.31 owed as of March 24, 2019.

The swimsuit additionally calls for curiosity at 10 % yearly from February 1, 2019, till the date of judgment, in addition to post-judgment curiosity till the debt is absolutely paid.

Pan Ocean, in its defence and counterclaim filed by Senior Advocate George Babalola, rejected many of the allegations.

The corporate argued that its monetary troubles have been worsened by the NNPC’s alleged seizure of crude oil valued at $24,091,674 between January 2018 and March 2019.

Moreover, Pan Ocean pointed to huge capital investments, together with a 3D/4D seismic survey, a 200 million commonplace cubic toes per day (mmscfd) gasoline processing facility, and the Amukpe–Escravos crude oil pipeline challenge, which they are saying strained their funds.

It claimed that the seismic survey alone price $20.87 million and was designed to spice up OML 98’s declining manufacturing ranges.

Following the lease revocation, Pan Ocean mentioned it continued to function OML 98 as a “default operator” on behalf of the federal authorities till Might 2021, when the Nigerian Petroleum Improvement Firm (NPDC) assumed full management.

Throughout that interval, the corporate claimed it incurred $65.35 million in operational bills, of which $36 million has already been reconciled with the Division of Petroleum Sources (now the Nigerian Upstream Petroleum Regulatory Fee, NUPRC).

In whole, Pan Ocean is counter-claiming roughly $110 million—comprising $65,352,399 for post-revocation operations (together with each reconciled and unreconciled prices), $20,874,164.40 for its share of the seismic knowledge funding, and $24,091,674 as its 40 % share of crude oil revenues allegedly withheld.

The corporate insists it’s entitled to set off these reconciled prices in opposition to the federal government’s declare and seeks full reimbursement for bills it incurred throughout its administration of OML 98.