Industry Power

Nigerian court freezes Shell accounts ahead of $4bn Aiteo lawsuit

A federal court in Lagos, Nigeria has issued an injunction barring Shell’s subsidiares in the country from withdrawing money at 20 local banks until it ringfences potential damages in a lawsuit brought against the supermajor by Aiteo Eastern E&P.

Aiteo is seeking about $4 billion in total over alleged problems with the Nembe Creek Trunk Line (NCTL) pipeline it bought from the Anglo-Dutch group in 2015 and over claims Shell undercounted its oil exports.

Court documents seen by Reuters show that Aiteo is seeking compensation over what it says was the poor condition of the pipeline and associated lost oil sales.

Aiteo also accuses Shell of deliberate improper metering of the Nigerian company’s oil exports from the Bonny Light terminal.

It is seeking $2.7 billion over the pipeline deal plus $1.28 billion for lost oil sales, the court documents show.

A spokesman for the Shell Petroleum Development Company (SPDC) told Reuters the allegations are “factually incorrect”.

“SPDC is working to secure an expeditious discharge of the freezing injunction, which we believe was obtained by Aiteo without any valid basis,” an SPDC spokesman said.

Aiteo declined to comment to Reuters on an ongoing legal case.

The lawsuit is latest in a string of legal headaches for the biggest international oil company operating in Nigeria, Africa’s biggest oil exporter.

A UK court last week cleared the way for local communities to sue the company over oil spills in the West African nation, and last month Shell lost a case brought in the Netherlands by Nigerian farmers and fisherman over pollution claims.

Shell, meanwhile, has initiated international arbitration proceedings against Nigeria over a case relating to oil spills that took place during the 1967-1970 Biafran war.(Copyright)

Power Production

Nigeria resumes petrol import from China

Nigeria, Africa’s biggest oil producer and exporter, has resumed the importation of petrol from China, the world’s top crude oil importer.

The Asian country shipped 37,000 metric tonnes of petrol to Nigeria in September for the first time since July 2019, data from the General Administration of Customs showed, according to S&P Global Platts.

China, a major exporter of transportation fuels, has extended exports to Africa in recent years.

The first African country to receive Chinese petrol was Togo in April 2018 at 50,000 mt, followed by Nigeria in January 2019 at 51,000 mt, historical GAC data showed.

The most recent diesel exports from China to Africa were in June, with Kenya and South Africa receiving 40,000 mt and 35,000 mt, respectively, according to the data.

China’s annual crude oil imports increased by 0.9 million barrels per day in 2019 to an average of 10.1 million bpd, according to the United States Energy Information Administration.

The EIA said China’s new refinery capacity and strategic inventory stockpiling, combined with flat domestic oil production, were the major factors contributing to the increase in its crude oil imports in 2019.

Last year, China’s refinery capacity increased by 1.0 million bpd, primarily because two new refining and petrochemical complexes came online with capacities of 0.4 million bpd each.

As a result, the country’s refinery processing also increased to an all-time high in 2019, averaging 13.0 million bpd for the year, according to the EIA.

Nigeria has continued to rely heavily on importation for many years to meet its fuel needs as the nation’s refineries remain in a state of disrepair.

Uneven demand recovery in Africa has led to a divergence in support for Asian transportation fuel markets as diesel and jet fuel requirements weaken while demand for petrol remains robust, industry sources said.

The slowdown in Africa’s diesel and jet fuel demand, in particular, has removed a significant pillar of support from Asian middle distillate markets after buoying them for most of the third quarter, the sources said.

The African continent draws most of its petrol and middle distillate imports from the Persian Gulf and the Mediterranean, and an increase in demand typically lends indirect support to Asia, market sources said.

Source: Punch

Power Production

Improved power supply will lift Nigerians out of poverty – Elumelu

The Chairman of Transcorp and Founder of the Tony Elumelu Foundation (TEF), Mr. Tony Elumelu, has stressed that improving access to electricity remains the single most critical factor for lifting a lot of Nigerians out of poverty and job creation for the teeming youth.

He said this during the announcement of Transcorp Consortium’s 100 per cent acquisition of the 966MW installed capacity Afam Power Plc and Afam Three Fast Power Limited, at an acquisition cost of N105.3 billion.
According to Elumelu, who is also the Chairman of the United Bank for Africa Group, bringing affordable, dependable power to the Nigerian people is core to Transcorp’s mission.

“Our significant investments in the power sector are demonstrations of our contribution to the economic transformation that I know Nigeria is capable of. Power remains the single most critical factor for lifting our people out of poverty and job creation for our teaming youth.

“The acquisition marks a significant milestone for Transcorp in the pursuit of its corporate purpose of improving lives and transforming Nigeria. I am honoured to be working with the federal government and urge it to continue its policy of creating an enabling environment, which sustains the confidence of both local and foreign investors – and delivers the opportunities and aspirations that all Nigerians seek.”

Speaking at the event, Vice President, Prof. Yemi Osinbajo, said: “Today marks a milestone for the country with a return to private sector investment in the power sector.

“This investment by Transcorp in acquiring ‘Afam Power Plc’ and ‘Afam Three Fast Power’ is the first of many new investments planned in the sector across the value chain. We expect that under Transcorp’s ownership the operational capacity of the facility will be raised to its full capacity.”

Speaking on Transcorp’s track record, the Director-General of the BPE, Mr. Alex Okoh said “Transcorp Consortium is one of the success stories of Nigeria’s Privatisation Programme. Through its investments in Transcorp Hotels Plc and Transcorp Ughelli Power Limited, the consortium has consistently achieved its performance targets as contained in the respective post-acquisition plans.”

Source: This day