Economy

How Shell Duped Nigeria of $406.75 Million – FG

Published

8 years ago

October 4, 2016

The Federal Government is demanding $406.75 million from Shell Petroleum Development Company of Nigeria Limited and its subsidiary, Shell Western Supply & Trading Limited, over alleged crude oil theft.

The amount, according to court documents presented in Lagos on Tuesday, represents the shortfall of the money the multinational oil firm paid into the Federal Government account with Central Bank of Nigeria.

The money was said to be for crude oil lifted in 2013 and 2014.

Prof. Fabian Ajogwu, Government Counsel, had accused the Anglo-Dutch company of not declaring or under-declaring crude oil shipments during the period, following forensic analysis of bills of laden and shipping documents.

Mr. Ajogwu, armed with sworn affidavits of three U.S.-based professionals, claimed that Shell cheated Nigeria of the revenue.

The professionals included Prof. David Olowokere, a U.S. citizen and lead Analyst at Loumos Group LLC, a technology and oil and gas auditing firm.

The others are Jerome Stanley, a Counsel at Henchy &Hackenberg law firm and head of the legal team engaged by Loumo Group LLC and Michael Kanko, founder and current Chief Executive Officer of Trade Data services Company.

According to the documents, the consortium of experts tracked the global movements of the country’s hydro-carbons, including crude oil and gas.

They identified the companies engaged in the practices that led to missing revenues from crude oil and gas export sales to different parts of the world.

They also revealed discrepancies in the export records from Nigeria with the import records at U.S. ports.

The undeclared shipments between January 2013 and December 2014 brought the total value of the entire shortfall to $406.75 million dollars, according to the documents.

The defendants were said to have failed to respond to a Federal Government’s letter through its legal representative, seeking clarification to the discrepancies.

The Federal Government is therefore, seeking a court order to compel the two companies to pay $406.75 million, being the total value of the missing revenue and interest payment at 21 per cent per annum.

In addition, the government is also asking Shell to pay general exemplary damages in the sum of $406.75 million and the cost of instituting the legal action.

However, the Presiding Judge, Mojisola Olatoregun Isola, has adjourned the matter to Oct. 20, for the mention of the case.

Meanwhile, the Federal government has also sued Chevron, Total and Agip, asking for a total of $12.7 billion over alleged non-declaration of 57 million barrels of crude shipped to the U.S. between 2011 and 2014.

They are among 15 oil majors targeted by the government for the recovery of 17 billion dollars in deprived revenue, the News Agency of Nigeria learnt .