FG Drags IOCs To Appeal Court Over Undeclared Crude Oil Shipments

 The Federal Government last week filed two appeals against the judgments of Justice Mojisola Olatoregun of the Federal High Court in Lagos dismissing the suits it filed against two International Oil Companies (IOCs), Nigeria Agip Oil Company Limited and Brasoil Oil Services Company Nigeria, for under-declaring the volume of crude oil it shipped between January 2011 and December 2013.

Justice Olatoregun had earlier held that the federal government did not back its allegations against the oil companies with sufficient evidence.

But in the appeals, the federal government said the judge erred, saying it provided enough evidence to secure favourable judgment.

Counsel to the federal government, Prof. Fabian Ajogwu (SAN), had commenced the suits against Agip and Brasoil, among others, at the Federal High Court claiming that the oil companies had failed to fully declared crude oil shipments from Nigeria to the United States of America amounting to $55,000,000 and $54,890,000, respectively, during the period of 2011 to 2013.

It prayed the court to compel the oil firm to pay the $55 million with an annual interest of 21 per cent, as well as $55 million as exemplary damages.

During trial, the plaintiff called one witness and tendered three exhibits, while the defendant also called one witness and tendered 12 exhibits.

The federal government sued after a forensic analysis linking the decline in crude oil export and government revenue to the alleged under-declaration of volume of crude oil shipped out of the country by the oil companies.

Three United States-based experts - a US citizen and Lead Analyst at Loumos Group LLC, a technology and oil and gas auditing firm based in the US, Prof. David Olowokere; a counsel in the law firm of Henchy & Hackenberg, Jerome Stanley, and founder and Chief Executive Officer, Trade Data Services Company, State of Arizona, US, Michael Kanko deposed to supporting affidavits to the suit.

According to them, millions of barrels of crude oil were allegedly exported by the defendants and sold to buyers in the US but the companies did not make due remittance to the federal government contrary to the terms of agreement.

Agip and Brasoil denied the allegations and urged the court to dismiss the suit.

In her verdict, Justice Olatoregun held that the plaintiff failed to provide sufficient evidence to substantiate the claims. She held that there was no evidence that the crude oil the defendant lifted was more than what was declared.

According to her, it is trite and settled law that he who asserts must prove.

She held that the exhibits before her did not convincingly show a shortfall in the shipment of 949,096 barrels of crude oil lifted by a vessel, MT Cosmos.

"While I do not have any evidence to suggest that it is impossible for the defendant to carry undeclared crude oil from Nigeria, I have no evidence to show that MT Cosmos carried the excess 500,000 barrels of crude oil with same bill of lading," she held.

Justice Olatoregun added that the plaintiff failed to prove its case by supplying the requisite evidence, adding that the main purpose of final address is to assist the court.

"It is trite law that whoever asserts must prove that the facts exists. No amount of brilliant address can make up for a lack of evidence.

"The plaintiff failed to make out a case that 500,000 barrels of crude oil was offloaded in Pennsylvania.

"The case of the plaintiff fails on the lack of proof on the preponderance of evidence .

"At this stage, I do not find it necessary to proceed with the evaluation of the other reliefs.

"I therefore, proceed to make an order dismissing this suit; it is hereby dismissed," the court held.

The court also dismissed a similar suit against Brasoil, seeking to recover $4.8million in alleged missing oil revenue.

Similar lawsuits against Total E&P Nigeria Plc and Chevron Nigeria Limited are pending before the court.