Statoil loses stake in Nigeria’s largest deepwater oil facility

0
271
 
A Tribunal has ruled that Norwegian oil company, Statoil, forfeited its 5% stake in Agbami Oilfield as well as the payment of $1.1bn to its former partners, Petrobras and Chevron, after losing an arbitration hearing to re-determine the shares in Agbami Oilfield; Nigeria’s largest deepwater oil facility.
 
The ruling against the Norwegian oil company was given by a tribunal sitting in Nigeria which was comprised of three high-ranking English lawyers.
During the hearing, the tribunal turned down Statoil’s application for a rejection of the “2015 expert determination” in the case which favoured Petrobras, Chevron, and Famfa Oil.
The Agbami oilfield is a joint venture partnership between Statoil, Chevron, Petrobras and Famfa Oil. The facility consists of two oil blocks, one owned by Statoil and Chevron while the other is owned by Chevron, Petrobras, and Famfa Oil; with Chevron having the majority shares.
 
The oil companies jointly developed the facility with the understanding that the costs and production rights will be allocated based on the estimated percentage of oil in the two oil blocks.
Unfortunately, the companies could not sustain this agreement. This led to the decision to introduce an expert from Gaffney Cline and Associates in 2012.
The expert determination in 2015 asked that Statoil’s shares in Agbami oilfield be reduced from 20.21% to 15.04% due to a “newly acquired data”. Statoil, however, contested this development by challenging it before a tribunal chaired by two British counsels and Australia’s Michael Pryles.
 
Statoil’s claim was rejected twice in 2015, with the tribunal insisting that its shares in the Agbami oilfield be reduced from 20.21% to 15.04%. This had prompted the company to tender another arbitration claim, which was yet again turned down by a different tribunal. 
 
Reacting to the development in April this year, the embattled company said that it was “currently evaluating the arbitration ruling”, noting that it will have “no impact on Statoil’s accounting for the Agbami redetermination as the outcome of the expert ruling has been provided for.”
 
It also stated that it had already noticed the reduction of its stake in the oilfield by checking through its Nigerian tax provision.
Note that an application challenging the 2015 award upholding the expert’s interim ruling is still awaiting a ruling by the Supreme Court of Nigeria.
It has not yet been decided how Statoil’s shares will be reallocated. But one known fact is that the process is worth at about $1.1 billion.

Leave a comment

NO COMMENTS

LEAVE A REPLY