Federal High Court Sets January 22, 2025, for Update on Shell and Global Gas Settlement Talks
The Federal High Court has scheduled January 22, 2025, as the date for Shell Petroleum Development Company of Nigeria Limited (SPDC) and Global Gas and Refining Limited to provide an update on their ongoing out-of-court settlement discussions. The case involves an alleged breach of the Gas Processing Agreement (GPA) from 2002, in which Global Gas claims that Shell failed to supply wet gas as stipulated.
Justice Inyang Ekwo set the date after both parties informed the court that settlement efforts were still in progress. The lawsuit, filed by Global Gas, also seeks to prevent the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) from approving Shell’s proposed $1.3 billion divestment of its assets to Renaissance Consortium.
Claims and Counterclaims in the Case
Global Gas, represented by its Executive Chairman Ken Yellowe, alleges that Shell did not uphold its end of the 2002 agreement to supply wet gas. Yellowe claims that without a temporary court order, the planned sale of Shell’s assets could leave Global Gas without recourse in its ongoing dispute. He emphasized that while the dispute is before the Supreme Court, the NUPRC is not a party to that case, requiring intervention from the Federal High Court to prevent the sale.
In response, SPDC’s legal team argued that the transaction with Renaissance was not a direct asset sale but a share sale, with SPDC’s shareholder intending to transfer shares rather than physical assets. SPDC’s Legal Counsel, Kingsley Osuh, maintained that any compensation claim by Global Gas could still be fulfilled by SPDC if the court ruled in its favor.
Court Proceedings
During the hearing, Global Gas’s counsel, Patrick Ikweato (SAN), informed the court that his client was awaiting Shell’s finalization of the settlement terms. Shell’s legal representatives confirmed that efforts toward an amicable resolution were underway. Meanwhile, NUPRC’s counsel, Chikaoso Ojukwu (SAN), requested that he be kept informed of settlement developments. Justice Ekwo adjourned the case to January 22, 2025, instructing that both Shell and Global Gas keep the NUPRC updated on any correspondence regarding settlement negotiations.
Background on Shell’s Divestment in Nigeria
Shell has been gradually moving away from its Nigerian onshore assets, citing operational challenges like oil theft and spills. In 2021, Shell announced plans to divest its 30% stake in The Shell Petroleum Development Company of Nigeria Limited (SPDC). After a temporary pause in 2022, the divestment discussions resumed in 2023. The proposed sale to Renaissance Consortium for $1.3 billion, however, faced regulatory and public scrutiny, including opposition from civil society groups led by Amnesty International.
Despite initial reports that NUPRC had accepted Shell’s bid, the regulatory body later clarified it was still conducting due diligence. In October 2024, the NUPRC reportedly rejected the sale, citing Renaissance’s lack of qualifications to manage the assets.
Key Takeaways
- Next Court Date: Shell and Global Gas will report on their settlement progress on January 22, 2025.
- Divestment Hurdles: The proposed $1.3 billion sale of Shell’s assets to Renaissance Consortium has been controversial, with NUPRC raising concerns about the buyer’s qualifications.
- Background Context: Shell’s exit aligns with a broader strategy to transition from Nigerian onshore assets due to operational and regulatory issues.
The court’s next session will determine whether Shell and Global Gas can resolve their longstanding dispute outside of court or if further legal action is required.
0 Comments