A Federal High Court sitting in Lagos on Wednesday dismissed allegations of illegal exportation of crude oil to the United States made by Nigeria’s Attorney-General (AGF), Abubakar Malami, against the local units of two international oil firms, Eni SpA and Petroleo Brasileiro SA.
President Muhammadu Buhari’s administration, in a lawsuit filed in 2016, sued the companies as well as the local arms of Chevron Corp., Royal Dutch Shell plc and Total SA, claiming they failed to declare or under-declared 57 million barrels of oil shipped to US ports between 2011 and 2014, according to court documents.
But Justice Mojisola Olatoregun said Wednesday in Lagos that the Nigerian government could not provide evidence to back its lawsuit against Agip, a subsidiary of Eni, and Petrobras’ Brasoil, according to Reuters.
“The court did not agree with our position,” Reuters quoted Ituah Imhanze, a lawyer who represented Nigeria’s government in court, to have said.
Imhanze added the government would file an appeal by the end of Thursday.
Representatives of Eni and Petrobras did not immediately respond to an email requesting comment.
The cases against Chevron, Shell and Total are ongoing, although they have denied any wrongdoing.
The government had accused the oil companies of short-changing it by allegedly shipping several barrels of crude oil out of Nigeria without making due remittance to the government. As such, the government is now seeking the help of the court to recover almost $12 billion in what it termed missing crude oil revenue.
In February this year, Africa’s biggest oil producing country ordered International Oil Companies (IOCs) to pay nearly $20 billion in taxes owed to local states.
The accusation came after the Federal Government and states government settled a dispute over the distribution of revenue from hydrocarbon production. The sides agreed last year that Abuja would pay the states several billion dollars, three company and government sources said.
These new directives by the Nigerian government have been widely observed by industry experts and members of the foreign community as a shakedown by the government.
Nigeria, a member of the Organisation Petroleum Exporting Countries (OPEC), produces an average of 2 million barrels of crude per day but could pump much more under the right regulations and international investment.
With a GDP of over $376 billion, oil remains the country’s chief source of income, accounting for approximately 56 percent of state revenue and 95 percent of its foreign exchange earnings.
Oil is the heart of Nigeria’s economy, but that heart is not entirely healthy. Nigeria’s state-dominated oil industry is declining, afflicted by systemic corruption, starved for international investment, and hit hard by weak oil prices.
