Statoil and Abebe Ruling

The Lagos Division of the Court of Appeal Tuesday dismissed the appeal filed by a Norwegian oil firm, Statoil Nigeria Limited, challenging the judgment of a Federal High Court, that it should pay a businessman, Dr. John Abebe, and his company, Inducon Nigeria Limited, 1.5 per cent of its (Statoil) profit accruable from the three oil blocks allocated to it (Statoil) by the Federal Government.
If calculated based on the income of the oil firm since it entered the nation’s oil industry, the 1.5 per cent of the profit amounts to about $3 billion.
The payment is to compensate Abebe for bringing the oil firm, in the early 1990s, to do business in the country.
Statoil, had been prospecting for crude oil from one of the blocks since 2008 from which it had made over $8 billion, while the other two have proven reserve of over four billion barrels of oil and gas.
In a unanimous decision, the panel of the justices held that it would amount to an injustice if Abebe and his company were not paid the amount knowing full well that he brought the foreign firm to Nigeria to explore crude oil.
In the lead judgment read by Justice Helen Ogunwumiju, the court said Statoil’s appeal did not only lack merit, it dismissed it and awarded a cost of N50,000 against it.
She faulted the argument of the oil firm and its counsel, Fidelis Oditah (SAN), that judgment of the lower court was against the weight of evidence adduced, adding that it had no value.
Justice Ogunwumiju also held that based on the evidence before the court, it was clear that there was an agreement between Abebe and Statoil, “whether orally or written”.
She said since there was an alliance between British Petroleum (BP), Statoil and Abebe, the fact that BP later pulled out and left the country did not mean that the agreement reached with the businessman had died.
She added that because Statoil was a beneficiary of the crude oil exploitation which was the reason why it came to Nigeria, it meant that it inherited the terms of agreement BP made with Abebe based on the 50:50 alliance and agreement.
The judge faulted the argument of the appellant that the policy of the Federal Government on local content as canvassed by the respondent had not taken off when the alliance was struck.