Oil: Nigerian Government Heaves A Sigh Of Relief Over 11.4 Billion Case with P& ID; Borrows $3.45 Billion From The world Bank

By Stephen Ubnna

 Between  August 2012 and  2023, the Nigerian government and  process and Industrial  Developments, P &ID, a foreign  gas supply company,,  have been shuttling  a United Kingdom International Arbitration   Court ove  $11.4 billion payment  for a failed  20-year  contract.

The British Offshore Company had in January 2010, during the Administration of former President Goodluck Jonathan signed  a gas supply   Processing Agreement , SPA, with the Nigerian government to  develop .  a processing plant in Calabar, capital of Cross river state.  Going by the Agreement, the Nigerian government would provide the gas to P&ID, for free for over 20 years.

   The two parties were said to have agreed to split the processed resource, with the Nigerian government using its share to help finance the country’s power grid but the project never got off the ground. This is because P&ID, never built the gas processing plant in Calabar as promised and the Nigerian government never kept its part of the bargain  of providing the company with free gas.

 IT was obvious that that the multi-billion-dollar contract was heading for a collapse and It finally failed in 2012.   

Until the signing of the signing of the $11.4 billion contract, by the two parties in 2010, one   Grace Taiga , a ministry of Petroleum Resources   former Head Lawyer , believed to be among  the three Nigerians  with  hopes to share  in the record-breaking  $11.4 billion   contract awarded in favour  to the little known  offshore company by a British Court . The other two Nigerians who were expected to benefit from the deal  were Adetunji Adebayo  and Mohammed Kuchazi, both businessmen.

  Asource told The Value that that the amount to be given to the three Nigerians has been   built into the $11.4 billion with interest.  Given that the contract had failed, may have informed why the Company had dragged the Nigerian government to a London Court of International Arbitration and sought for a $5. 96 billion compensations from the country.  

The Company may have had a breather when in 2017, during the Administration of former President Muhammadu Buhari,  the Court  ruled against the Nigerian government for  breaching the contract  and ordered the country to pay  $6.6 billion  with interest  starting from 2013.  Recall that prior to the Court verdict,   the interest   on the contract sum had been fixed at seven percent  daily  and had accumulated to over$11 billion.

The then Katsina state born Nigeria n President had refused to pay the money to the British offshore company and opted’’ to appeal against the enforcement of the award’’. The then Nigerian President had vowed in 2019, to confront the British firm which he had said was attempting to defraud Nigeria billions of dollars of its oil revenue.  In September, 2020, and the Court granted the relief sought by the country to appeal against the award.

 The Nigerian government may have stood its ground not to pay the money awarded to the P&ID, by the British Court as it has argued that ‘’there was enough evidence to show that the contract and the arbitration award  were procured by fraud’’. The government had said that the individuals who have been precancelled down by the company to share from the deal   were being tried by the country’s Economic and Financial Crimes Commission, EFCC, for alleged money laundering and graft.

 Indeed, the Commercial Courts of England had  ruled  that  that The $11.4 billion  awarded  against Nigeria  by the P&ID, was ‘’obtained  by fraud’’,  confirming the Nigerian government position on the matter.

 The trial Judge, Justice Robin Knowles, was emphatic in his remarks that  ‘’the awards  were obtained by P&&ID,  by fraud in Court.  He did not stop there. He had stated further that award were and by the way   in which they were procured, ‘’it was contrary to public policy’’. The Lawyer may not have accepted t all the allegations of the Nigerian government against the British offshore company and their Nigerian Collaborators.

The Trial British Judge may have given officials of P&ID, a cause to worry when he set aside the award of the arbitration Court in whole or in part and further declared that ’’the award  is of no effect  in whole or part’’. It was bad news, for the three Nigerians who were to share from the fraudulent deal with P&ID.  

An elated Tinubu, had said that that the British Commercial Court Judgment   proves that ‘’no nation states  will be  held hostage any longer  by economic  conspiracies  between private firms  and solitary  corrupt  officials  who had conspired  to extort  and indebted the very nation  they have sworn  to defend  and protect’’.

The Nigerian President had said that ‘’the country for too long had been at the receiving end of unjust economic malpractice and covert exploitation’’ and would no longer give in to such.’

 He had  gave kudos  to officials of the Federal ministry of Justice  Attorney General of the Federation,  AGF, Lateef Fagbemi, a Senior Advocate  of Nigeria, SAN, and  for their tremendous efforts in following up the case to its logical conclusion. Fagbemi, the AGF, had said   that that the victory secured by the Nigerian government in the P&ID,   litigation should serve as a pointer’’ to others  who might  be nursing  or nurturing  any plan  to swindle  the  government  that they would never succeed in their plan’’.

According to him, ‘’the victory   has brought to an end the legal battle between the two parties which had been on since 2012,   until the Nigerian government  was awarded  to pay $6.6 billion  to the Company  in 2017, with the interest of seven percent  starting from  May , 2013.

 The minister had said   that ‘’the judgment would also serve as a damning indictment of predatory international investors who should now rightfully be deterred   from prying upon Nigeria and other developing nations to justify their greed’’.

 Armed by the British Commercial Court ruling, the AGF, had made it clear that   P&ID, and its Nigerian Associates and foreign collaborators had shamelessly   attempted ‘’ to defraud the  country  and enrich themselves  through sharing  the Nigerian documents, fraud, bribery  and Corruption  on industrial scale’’.  

Those who thinks that Nigerian government and the P&ID, case is over may have to do a rethink. The Nigerian minister of Justice had told those that cares to listen that the case just started    as there would be further hearings by the UK Court ‘’ to determine costs payable by P&ID, and other matters’’.

While the Nigerian government are celebrating the victory over P&ID, an offshore British Company, in a London Commercial Court, the former Lagos state governor appears to have bowed to pressure from the Leadership of the World Bank and the International Monetary Fund, IMF, including Multilateral Financial Institutions, London Club and Paris Club, to borrow to finance the country’’s economy.

 This is evident as the Federal Executive Council, FEC, has approved a $3.45 billion, zero-interest   World Bank  loan application  for the financing of five undisclosed items. Wale Edun, minister of Finance and Coordinating minister of the Economy, had said that the loan  request  is payable  within  40  years  with a 10-year  moratorium, meaning that the loan repayment  would start from 2033.

 This may have informed why the minister had said that the country is expecting a foreign exchange flow of $10 billion in the coming weeks . He had said that  in addition to the supply  of Forex  through the Nigerian National Petroleum Corportation, NNPC,  now baptised, Nigerian Petroleum Development Company Limited, NPCL, with the passage of the Petroleum Industry Bill, PIB, by the National Assembly and  signed into Law by  former President Buhari, in August , 2021, , increased  production of crude oil,  reduced expenditure, from transactions  such as  forward sales,  based on the government  discussions  with the  Sovereign Wealth Funds that are ready to invest,  and provide  advanced  alongside  that investment , noting that ‘’there  is a line  of sight  of $10 billion  worth of forex in the relatively  near future or  in weeks  to come.

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