Oil companies settle multi-billion suits against Nigeria

Four international oil companies have agreed to end lawsuits they filed in the US against Nigeria’s state-owned oil company, after signing a contract extension on production sharing agreements. Bloomberg quoted 22 August letters to two New York federal judges saying that the four companies – Shell Plc, ExxonMobil Corporation, Chevron Corporation and Equinor – have agreed to settle with the Nigerian National Petroleum Company (NNPC) and will terminate ongoing litigation once the new arrangements take effect. The Premium Times reports that, according to Bloomberg, lawyers for Equinor and Chevron asked the judge to suspend the case until the end of October to allow sufficient time for the conditions to be satisfied and for the settlement agreement to become effective. Once that happens, the companies ‘expect to withdraw this action,’ the letter said. It noted that Exxon and Shell, in a separate letter, said they anticipate being able to do the same after 60 days. Equinor and Chevron filed a suit in the US asking a court to enforce a US$1.1bn award issued by an arbitration tribunal against the NNPC in 2015. Shell and Exxon initiated similar proceedings in New York in 2014 over a US$1.8bn arbitration award. Both suits followed allegations by the companies that the NNPC took crude beyond its entitlement under contracts signed in 1993 that were designed to incentivise the companies to develop deep offshore blocks.