The Supreme Court on Thursday delivered a judgment in favour of Seplat Petroleum Development Company Plc and Chevron Nigeria Limited in a litigation brought against both parties by Brittania-U Nigeria Limited that had prevented the full transfer to Seplat of a 40.00% working interest in OML 53 and effective 22.5% working interest in OML 55 held through 56.25% ownership of the share capital of Belemaoil Producing Limited that the company had acquired from Chevron in February 2015.
“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.
Seplat had on February 5, 2015 announced that it had acquired a 40.00% working interest in OML 53 from Chevron.
Simultaneously the company also announced that it had concluded negotiations to purchase 56.25% of the share capital of Belemaoil, a Nigerian special purpose vehicle that had completed the acquisition of a 40.00% interest in the producing OML 55, also from Chevron.
Seplat’s effective working interest in OML 55 as a result of the acquisition is 22.50%. the Nigerian National Petroleum Corporation (NNPC) holds the remaining 60.00% interest in both OML 53 and OML 55 and, pursuant to the Joint Operating Model, Seplat was designated operator of OML 53 and OML 55.
However, the full completion and transfer of these assets and operatorship was hindered by a litigation brought against Chevron and Seplat by Brittania-U, one of the counter bidders that also sought to acquire the assets from Chevron and contested the outcome of the sales process. The litigation reached the Supreme Court following an appeal brought by Brittania-U against the judgment of the Court of Appeal in Nigeria.
The Court of Appeal decision delivered on June 20, 2014 set aside the ruling of the lower court which had extended an ex-parte order of interim injunction obtained by Brittania-U at the commencement of the action. Brittannia-U had also sought the order of the Supreme Court for an interlocutory injunction restraining Chevron and Seplat from proceeding with the sale and transfer of the Assets, until the determination of the appeal by the Supreme Court.
Thursday’s ruling by the Supreme Court allows Chevron to conclude the full transfer and operatorship of the assets to Seplat with immediate effect.
