Chevron, Total lose bid to stop trial for alleged illegal oil shipments

A Federal High Court in Ikoyi, Lagos State, has dismissed an application filed by two major oil firms, Chevron Plc. and Total Plc., seeking to stop the companies’ trial on allegation that they under-declared the quantity of crude oil they lifted from Nigeria. Justice Mojisola Olatoregun struck out the applications for lack of merit.

Justice Mojisola Olatoregun struck out the applications for lack of merit.

At the hearing, counsel for the Federal Republic of Nigeria, Fabian Ajogwu, told the court that the government had filed a motion to amend the claims and file additional processes. Chevron’s counsel, Miannaya Aja Essien, said the firm had filed a counter-affidavit along with a written address seeking the dismissal of the suit.

In his ruling, Justice Olatoregun described the company’s preliminary objection as premature, and struck it out.

The judge also struck out an application by Total Plc., which similarly sought a ruling to stop its prosecution by the Nigerian government over undeclared crude lifting.

Ajogwu informed the court that the government had filed an application on June 6, 2016 to amend its claims against Total. The counsel to Total Plc., Babatunde Fagbohunlu, asked the judge to dismiss the government’s suit, a plea the judge dismissed as premature.

Justice Olatoregun adjourned the two lawsuits till October 25, for hearing.

The Federal Government sued the two oil firms in order to recover various sums of money representing the value of oil exports that the firms either did not declare or under-declared. The government is also pursuing similar recovery suits against other oil companies, but the details of those cases are not yet available.

Government is claiming the sum of $490,517,280 from Total. The government’s statement of claims, accompanied by sworn affidavit of three United States of America-based professionals, alleged that, sometime in 2014, it realized there was a decline in the revenue it derived from the exportation of crude oil. The decline triggered intelligence gathering of data, which revealed that the major reason was either the failure by the oil firms to declare oil shipments or their falsification of shipment documents to under-declare the amount of crude exports.

The three professionals who swore to affidavits are David Olowokere, the lead analyst at Loumos Group LLC, a technology and oil and gas auditing firm based in United States of America; Jerome Stanley, a counsel in the law firm of Henchy & Hackenberg, a law firm engaged by Loumos Group LLC, and Michael Kanko, the founder and Chief Executive Officer of Trade Data Services Company.

On discovering the shortfall, the Nigerian Government established a consortium of experts, both foreign and local, to track the global movements of the country’s hydrocarbon, including crude oil and gas. The experts were tasked with identifying the companies engaged in the practices that led to the colossal loss of revenues from crude oil and gas exports.