By: Ifeanyi Izeze<\/p>\n
No doubt, the recent injunction of a Federal High Court, Lagos, barring
\nRoyal Dutch Shell\u2019s Nigerian subsidiary from withdrawing money at 20
\nlocal banks until it ring-fences potential damages in a lawsuit brought
\nagainst the oil major by Aiteo Eastern E&P, an indigenous operator, is a
\nwelcomed development in our nation\u2019s effort to checkmate the
\nwidespread malfeasance and blurred business dealings by multinational
\noil operators in this country.<\/p>\n
For as long as they\u2019ve been in the Nigerian arena, most if not all,
\nthe foreign operating multinationals have often indulged in wilful
\nunfair practices and underhand activities against our national
\ninterests. And the case of Aiteo against Shell is just one in a million
\nof such _wuru wuru_ dealings which has characterised the conduct of the
\nforeign operators in our oil sector.<\/p>\n
The worst part of the whole insanity is that too many insatiably greedy
\nprivileged Nigerians at the corridors of power at different times and in
\nthe NNPC are aiding and abetting the ruining of their own country by the
\nwestern and lately Chinese interests operating in Nigeria.<\/p>\n
The bone of contention in this rare legal tussle between Shell and Aiteo
\nis that between 2016 and 2018, Shell putting to use a metering device
\nnot approved by the Department of Petroleum Resources (DPR)
\nshort-changed local operators, Aiteo, being the hardest hit, to the tune
\nof millions of barrels of produced crude oil.<\/p>\n
Aiteo, alongside some other indigenous oil producers, have had a
\nprotracted dispute with Shell alleging that the company short-changes
\nthem using unapproved methodology to calculate the volume of crude it
\nlifts on their behalf from the terminal. These indigenous operators
\nalleged that Shell deploys underhand practices including using
\nunapproved meters dubiously calibrated by the Anglo-Dutch giant to
\nfacilitate crude theft from the smaller Nigerian oil companies that uses
\nits facilities to transmit their produced oil to Shell\u2019s Bonny export
\nterminal tank-farm.<\/p>\n
As said, the interim Mareva injunction by the Lagos High Court is aimed
\nat recovering the cash value of the millions of barrels of crude
\nallegedly diverted from Aiteo, an indigenous operator by the Anglo-Dutch
\noil giant.<\/p>\n
Court documents show that Aiteo is seeking about $4 billion in total
\nover alleged problems with the Nembe Creek Trunk Line (NCTL) pipeline it
\nbought from the Anglo-Dutch group in 2015 and over claims Shell
\nundercounted its oil exports.<\/p>\n
Aiteo also accuses Shell of deliberate improper metering of the Nigerian
\ncompany\u2019s oil exports from the Bonny Light terminal. It is seeking
\n$2.7 billion over the pipeline deal plus $1.28 billion for lost oil
\nsales, the court documents show.<\/p>\n
Is it not curious that before Aiteo approached the court, the DPR, the
\ngovernment regulatory agency of the oil and gas industry in its
\nsettlement after investigations had ordered Shell Nigeria to refund
\n2,081,678 barrels of crude oil understated between 2016 and 2018 to the
\naffected local oil companies including Aiteo, Eroton, Newcross and
\nBelema Oil.<\/p>\n
In an official communication, signed by M. Alaku, titled, \u201cAllocation
\nof Bonny Terminal Gross Volume From June 2016 to July 2018 Based on
\nComparison of Metered Gross Volume Between the Coriolis Meter and LACT
\nUnit Installed on the NCTL,\u201d the DPR demanded that Shell should return
\nthe missing crude amounting to over 2 million barrels to the affected
\nlocal oil companies including Aiteo, Eroton, Newcross and Belema Oil.<\/p>\n
But because the Anglo-Dutch oil giant has no iota of regard for
\nNigeria\u2019s constituted authourities and thinks it can do whatever it
\nwants and get away with it (as has been its practice) because of
\ncorruption in our system, now this case is snowballing into a dirty
\nscandal of international dimension. And be sure that more of such cases
\nare coming involving some other foreign multinational operators.<\/p>\n
What is clear in this case is that some barrels of crude oil were indeed
\nmissing during the period under review and the Nigerian unit of the
\nRoyal Dutch Shell has indeed agreed to return the missing commodity.<\/p>\n
It is very clear that Shell and its co-travellers deliberately installed
\nthe Coriolis meter in bad faith and this was meant to deceive Aiteo and
\nother smaller Nigerian oil concerns regarding the amount of crude oil
\nvolumes due to them.<\/p>\n
As affirmed by industry experts, the Coriolis meter has poor zero
\nstability which affects flow meter accuracy. So it cannot be used for
\nfluids with lower density and sensitive to external vibration
\ninterference, among others.<\/p>\n
The angle the Nigerian government authorities are not taken seriously is
\nthat this exposed fraud which is prevalent in our nation\u2019s upstream is
\nbeyond mere crude oil theft. It borders heavily on national security and
\nfinancial crime.<\/p>\n
The case of short changing Aiteo, Belema Oil, Eroton and NewCross
\nthrough improper metering is just a scratch in the magnitude of the harm
\nShell, Agip and the rest of them have perpetrated against our national
\ninterest in the oil industry. Some government officials and retired
\nmilitary generals know this all the while but because they are all
\ncomplicit in the crime nobody is saying anything while the foreign
\nmultinationals now including the Chinese are having free hands to do
\nwith our oil what they want with impunity.<\/p>\n
Top managers of the NNPC especially NAPIMS and some other strategic
\nbusiness units are all part of this widespread fraud in accounting for
\nthe produced crude oil in this country. Is this how a serious country
\nruns?<\/p>\n
Imagine that we are talking of over 2 million barrels stolen from one or
\ntwo small indigenous marginal producers within just two years. This will
\ngive you an idea of what these foreign multinational companies had done
\nto Nigeria. If they can install fraudulent meters to undercut poor
\nmarginal producers, what should have happened at our various crude oil
\nexport terminals?<\/p>\n
The entire Nigerian shallow and deepwater arenas are littered with
\nFloating Production and Storage facilities (FPSO). And this is the
\nfrontiers where oil wells\/fields are bleeding as if there is not
\ntomorrow. Who checks how these foreign operators account for produced
\noil on those facilities- DPR and NAPIMS or the DSS? _Abegi_!<\/p>\n
Though the Lagos High Court judgement in favour of the Nigerian
\nindependent is worth celebrating, if Aiteo thinks it has won the case or
\nit\u2019s going anywhere with it, the company should better have a rethink
\nbecause in our courts, everything can turn 360 degrees around overnight
\nand this is what is going to happen. Mark my words!<\/p>\n
It has been said serially that our court systems is one of the biggest
\nobstacles to the nation\u2019s fight against corruption and other financial
\ncrimes.<\/p>\n
These western multinationals and even the Chinese have come to know how
\nto manipulate our judicial system more than any of us in this country.
\nThey understand very well that the highest bidder wins the case in any
\nsituation no matter how bad their case.<\/p>\n
Recall what happened to the federal government\u2019s litigation against
\nShell, Agip and others over their frauds in crude oil volume
\nunder-declarations. This particular case was meticulously proven with
\ndocuments and data from foremost American metric companies and even the
\nFBI to show that the declared volumes of lifted crude oil exports from
\nNigeria by these companies were incredibly far lower than the actual
\nvolumes discharged at the various receptor facilities in the U.S and
\nChina. But what happened?\u00a0 Suddenly the Lagos High Court made a 360
\ndetour and quashed it for \u201clack of sufficient evidence to prove the
\nallegation of under-declaration.\u201d<\/p>\n
The Federal Government promised to appeal the judgement and for about
\nfour years now has the Attorney General done anything towards appealing
\nthe case? Nothing till today! That\u2019s the country we call Nigeria.<\/p>\n
Until our patriotism gets to the level of fanaticism and it\u2019s
\ngradually getting there, nothing is going to change in this country
\nbecause the injustice and the endemic rot in this country has become
\nsystemic and traditional. God bless Nigeria!<\/p>\n","protected":false},"excerpt":{"rendered":"
By: Ifeanyi Izeze No doubt, the recent injunction of a Federal High Court, Lagos, barring Royal Dutch Shell\u2019s Nigerian subsidiary from withdrawing money at 20 local banks until it ring-fences…<\/p>\n","protected":false},"author":1,"featured_media":78808,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","footnotes":""},"categories":[7],"tags":[],"class_list":["post-78807","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-articles-opinions"],"yoast_head":"\n