…ex parte order based on sale of interest in NCTL; and crude re-allocation programme, NOT crude theft/diversion
By Jerome Onoja
The Shell Petroleum Development Company (SPDC) has said that the recent interim freeze order on its bank accounts by a Federal High Court in Lagos, which was based on the sale of its interest in Nembe Creek Trunk Line (NCTL), as well as some issues arising from a crude re-allocation programme, would soon be a thing of the past.
Some media outlets had erroneously reported that SPDC will refund about 2.1 million barrels of crude oil from the Trans Niger Pipeline in line with a directive of the Department of Petroleum Resources (DPR). And that a Federal High Court sitting in Lagos had blocked the company’s account in January pending the hearing of the case this month.
However, DPR through its spokesman, Mr. Paul Osu, in response to media enquiries on Saturday February 13, 2021 described the allegations of crude diversion against SPDC as untrue and urged that the allegations be disregarded.
In its reaction to the allegations, SPDC in a release on Friday, noted that the freeze order on its accounts was obtained by Aiteo Eastern E&P Company Limited in relation to SPDC sale of its interests and two other SPDC JV partners in the Nembe Creek Trunk Line (NCTL) and OML 29 to Aiteo in 2015; and crude reallocation programme between injectors into the SPDC JV’s Trans Niger Pipeline and injectors into Aiteo’s NCTL.
It described the alleged diversion of crude oil as “factually incorrect”, informing that it has to do with a directive by the DPR to SPDC as operator of the Bonny Oil and Gas Terminal, to implement a crude re-allocation programme between injectors into the SPDC JV’s Trans Niger Pipeline and injectors into the NCTL.
“It is important to note the claims underpinning the interim freeze order obtained by the plaintiff, Aiteo Eastern E&P Company Limited, relate to the SALE of the interests of SPDC and two other SPDC JV partners in the Nembe Creek Trunk Line (NCTL) and OML 29 to Aiteo in 2015; and crude reallocation programme between injectors into the SPDC JV’s Trans Niger Pipeline and injectors into Aiteo’s NCTL which is a normal industry practice.
“The disputes are subject of ongoing litigation and SPDC is working to secure an expeditious discharge of the freezing injunction which we believe was obtained by Aiteo without any valid basis.
“The crude theft/diversion allegation is also factually incorrect. This is a distinct issue that relates to the directive by the Department of Petroleum Resources to SPDC as operator of the Bonny Oil and Gas Terminal, an asset belonging to the SPDC Joint Venture, to implement a crude re-allocation programme between injectors into the SPDC JV’s Trans Niger Pipeline and injectors into the NCTL.
“Crude allocation review and re-allocation is a normal industry practice to re-allocate previous provisional allocated volumes under the directive and supervision of DPR, and this is not an exercise resulting from crude diversion, underreporting or theft at the terminal. This industry practice is not peculiar to the SPDC-operated Bonny Oil and Gas Terminal alone and does not translate into any loss of volumes to the Federal Government of Nigeria,” SPDC said.
It further stated that, “The re-allocation in issue was initiated by SPDC as operator of the Bonny Oil and Gas Terminal, while the DPR validated and confirmed it for implementation for the concerned oil producers.
“Crude oil production metering and allocation are subject to specific guidelines issued by the industry regulator, DPR. SPDC strictly adheres to these guidelines and the implementation is regularly verified by the regulator.”
“SPDC and all Shell companies in Nigeria are responsible corporate citizens who conduct their operations in accordance with applicable laws and industry best practices,” the company added.
