Shell Petroleum Development Company

By Akin Kuponiyi

In its quest to recover all money siphoned through undeclared/under -declared lifting Nigeria of crude oil,the Federal government of Nigeria has renewed its legal battle against SHELL PETROLEUM DEVELOPMENT COMPANY OF NIGERIA LIMITED and its allied SHELL WESTERN SUPPLY & TRADING LIMITED.

Federal government is urging the court to compel the two companies to pay into the Federal Government of Nigeria’s account with Central Bank of Nigeria, the total sum of $ 406,751,070 United States Dollars being the total sums of the missing revenues from the shortfall/undeclared/under-declared crude oil shipments of the Federal Government of Nigeria and interest on same.

In all Federal Government of Nigeria has filed fifteen separate suits against fifteen oil Companies pending before Federal high court in Lagos.

In amended statement of claim filed before the court by a Lagos lawyer Professor Fabian Ajogwu, and accompanied by the sworn affidavit of three united States America based professionals, Federal Government of Nigeria alleged that sometime in 2014,it realised a decline in the revenue derived by it from the exportation of crude oil, the decline in revenue necessitated an intelligent based gathering of data, which showed that part of the major reasons for the decline in the revenue from crude oil exploration was due to undeclaration and under-declaration of crude oil shipments made by some major oil and gas companies operating in Nigeria.

The three professionals employed by the Federal Government of Nigeria are:

Professor David Olowokere, a US citizen who is the lead Analyst at Loumos Group LLC, a technology and oil and gas auditing firm based in United States of America.

Jerome Stanley, a counsel in the law firm of Henchy &Hackenberg, a law firm based in United States of America and head of the legal team engaged by Loumo Group LLC.

Micheal Kanko a citizen and resident of the state of Arizona United States of America, who is the founder and the current Chief Executive Officer of Trade Data services Company.

Nigerian Government established these consortium of experts (both foreign and local) for the intelligence -based tracking of the global movements of the country’s hydocarborns including crude oil and gas with the main purposes of identifying the companies engaged in the practices that led to missing revenues from crude oil and gas exports sales to different parts of the world.

In reconciling the export record from Nigeria, with the import records from respective ports of entry at the United States of America in the case of these two companies and others, The Data on shipment of the company, including its Bills of lading, Oil Vessels name used for the shipment, date of arrival at the destination ports, ports of origin, were used to identify the buyers of the undeclared Nigerian crude oil, and the sellers thereof, as well as quantity of crude oil exported from Nigeria. And the same data for the same shipment imported into United States were compared ;wherefore the comparison showed differences of crude Oil on the hand showed that some of the crude oil shipments declared to have been exported from Nigeria, was less than what was declared to have been imported into United States of America using the same shipment by the same vessel on the same bill of lading. On the other hand, some other shipments were not declared by the defendants to the requisite authorities, particularly the pre-shipments inspection Agents. In some instances, the crude oil shipments were completely undeclared.

The plaintiff (Nigeria Government ) alleged further that all crude oil and gas shipments /exports from Nigeria are required to be declared and inspected by pre -shipment Agents appointed by the Central Bank of Nigeria of revenue due from the crude oil shipments. The inspection records are to be deposited with ministry of finance Nigeria.

The Nigeria Government averred that high-technology information technology system including satellite tracking systems were deployed by consultants in gathering the various validated information establishing the shortfalls in the export declarations and the import declaration in the country of destination.

The plaintiff averred that on 6th of January, 2013 the defendants lifted crude oil on board and using vessel by name AUTHENTIC and shipped same to BP Oil Supply of 28301 Ferry Road, Warrenville, Illinois, USA at the port of Chester, Pennsylvania, United States of America with Bill lading number ALMYSVDM161212A3 Which shipment was not declared to the relevant authorities, resulting in the shortfall of 660,712 barrels of crude oil in the value of $72,678,320 as revenue to the Government.

On January 3rd, 2013, the defendants lifted crude Oil that resulted in the shortfall of 979,031 barrels of crude oil in the value of $107,693,410.

On the 14th of December, 2014,the defendants lifted crude oil on board and using a vessel by name EAGLE TUSCON and shipped same to Shell Deer Park of 5900 Texas 225,Deer Park, TX77536,USA at the port of Houston, Texas, United States of America with Bill of lading number AETK0909US14 which shipment was not declared to the relevant authorities, resulting in the shortfall of 499,048 barrels of crude oil in the value of $54,895,280 as revenue to the Federal Government.

The defendants were also alleged at three different times on board three different ships namely EAGLE TUSCON, EAGLE SEVILLE, OVERSEAS EVERGLADES Shipped crude oil that resulted in the shortfall of 3,697,737 barrels of crude oil in bringing the total value of all the shortfall to $406,751,070.

On January, 21,2016 the Federal government through its legal representative wrote a letter to the defendants drawing their attention to the above discrepancies and requested them to explain same, with specific documentation to clarify the discrepancies as a prelude to the repayment of the revenues and debt they now owe the government,but till date Federal government has not received from the defendants any payment pursuant to the said letter nor the requested documents .

Federal government averred that it has suffered huge and enormous financial loss as a result of the defendants under-declaration of the value of the crude oil they lifted and exported to the United States of America.
Consequently, the Shell Petroleum Development company of Nigeria Limited and Shell western &Trading limited action has not only hinder economy development in the country but has also undermined the sustainable economic development of the Nigeria for the benefit of its people.

Consequently, Federal government of Nigeria claims against the two companies severally and jointly are as follows :

An order of the court compelling the two companies to pay into the Federal government of Nigeria account with the Central Bank of Nigeria, the total sum of USD 406,751,070 being the total value of the missing revenue from the shortfall /undeclared/under -declared crude oil shipments of the country, made by the companies to United States of America.

Interest against the defendants at the rate of 21% per annum on the sum of $406,751,070 until the entire sum is liquidated.

General exemplary)damages in the sum of $406,751,070

The cost of instituting this legal action

The presiding judge, Mojisola Olatoregun Isola has adjourned till 20th of October,2016.for mention.

The author of this story Akin Kuponiyi can be reached at
[email protected]