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FG Alerts H/Court How Chevron, Total Under-declared Crude Export 

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Federal High Court seating in Lagos has started hearing on a suit brought forward by the Federal Government against two multinational oil giants, Total E&P Nigeria and Chevron.

Whereas the government claimed that Total E&P Nigeria shortchanged Nigeria to the tune of N74billion, it also told the court that Total E&P and Chevron Nigeria Limited under-declared the volume of crude oil they took out of Nigeria between January 2011 and December 2014.

The Federal Government is therefore seeking an order compelling Total E&P Nigeria to pay it $245,258,640.

According to the document tendered by the apex government, “the total value of the missing revenues from the shortfall /under-declared/undeclared crude oil shipments of the Federal Government of Nigeria.”

The Federal Government wants 21 per cent interest per annum on the sum until liquidation.

It is also praying for general damages of $245,258,640 from Total E&P Nigeria.

The Federal Government also filed a similar suit against Nigeria Agip Oil Company Limited over similar allegations.

Justice Mojisola Olatoregun-Ishola Friday ordered Total and Chevron to defend the allegations.

She dismissed their preliminary objections to a suit for being unmeritorious.

The plaintiff accused Total E&P of short-changing the government to the tune of $245,258,640 (about N74.8billion).

The oil giants allegedly shipped several barrels of crude oil without making due remittance to the government.

Justice Olatoregun-Ishola dismissed the preliminary objections filed by Total E&P and Chevron on the basis that they are unmeritorious.

The Federal Government, through its lawyer, Prof. Fabian Ajogwu (SAN), said his client 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, about 57 million barrels of crude oil were allegedly illegally exported by the defendants and sold to buyers in the US between January 2011 and December 2014.

They alleged the companies did not make due remittance to the Federal Government contrary to the terms of agreement.

The deponents cited an instance where Total allegedly shipped out 968,784 barrels of crude oil, valued at $106,566240, using a vessel named, TRIATHLON.

The shipment, they said, had a bill of lading numbered TCVMTRIATIA 1388; the oil giants allegedly failed to declare it to the relevant agencies.

According to the experts, the crude oil was sold to Tostsa Total oil Trading SA of San Felipe Plaza-Suite 2100, 5847SAN FELIPE, 770557-HOUSTON, US at the port of Philadelphia, Pennsylvania.

They cited another instance where about 491,850 barrels of crude oil, valued at $54,103,500, were allegedly shipped out without making remittance to the government.

The crude oil was allegedly shipped with a vessel named NORTH STAR, with a bill of lading marked, DROESVD23091101.

The product was allegedly sold to BP Products North America of 501 Westlake Park Boulvard, Houston, TX 77079 United States, at port of Texas City.

They also cited two other different occasions where 768,990 barrels of crude oil, valued at $84,588,910 was loaded on a vessel named AUTHENTIC with bills of lading marked, ALMYSVDM17041101 and17041102.

It was allegedly sold to Socap International Limited of Cannon’s Court, 22 Victoria Street, Hamilton, HM12.Bermuda at the port of Chester Pennsylvanian, United States, without making due remittance to the government.

The government alleged that Total bypassed the pre-shipment agents appointed by the Central Bank of Nigeria (CBN) to inspect crude oil shipments.

This, the plaintiff said, led to the failure of the shipment records to be deposited at the Ministry of Finance.

The Federal Government said its consultants uncovered the alleged illegality using high-technology information technology system, including satellite tracking systems.

Total E&P Nigeria had through its lawyer Mr. Babatunde Fagbohunlu (SAN), filed a preliminary objection, urging the court to strike out the suit.

It was on the grounds that the suit failed to disclose a reasonable cause of action against his client.

Chevron, through its counsel Mrs. Miannaya Essien (SAN), also filed a similar application. It was dismissed.

The case will be heard on Tuesday, the 25th of this month.

Dr. Roze Clinic


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