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$406.8m shortfall: Court adjourns FG’s suit against Shell

By Innocent Anaba
LAGOS—A Federal High Court sitting in Lagos, yesterday, adjourned till May 31 and June 1, 2017, to hear a suit by the Federal Government, against Shell Western Supply & Trading Ltd, over the sum of $406.8 million, representing the shortfall of money paid by the company into government account with the Central Bank of Nigeria, CBN.

Shell engineer

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

The suit is pending before Justice Mojisola Olatoregun.

Defendants are Shell Petroleum Development Company of Nig. Ltd and its subsidiary, Shell Western Supply & Trading Ltd.
The Federal Government had also sued Chevron, Total and Agip, in a similar case before the court.
The FG is asking for a total of $12.7bn over alleged non-declaration of 57 million barrels of crude shipped to the U.S. between 2011 and 2014.

The oil companies are among 15 oil majors targeted by the government for the recovery of $17bn in deprived revenue.
At the resumed hearing in the matter, yesterday, counsel to the plaintiff, Mr Ituah Imhanze, informed the court of an application for amendment of his statement of claim.

He urged the court to grant his application and allow the plaintiff leave to tidy its pleadings.
The application for amendment was not opposed by the defence.

In a short ruling, Justice Olatoregun granted the application for amendment, but noted that there had been no remarkable progress in the suit since it was filed, other than amendments.

She adjourned till May 31 and June 1 for hearing, adding that the plaintiff must ensure it served all amended processes on the defence.

In a supporting affidavit, the federal government had accused the Anglo-Dutch company of not declaring or under-declaring crude oil shipments during the period.

It said that this was following forensic analysis of bills of laden and shipping documents, adding that Shell cheated Nigeria of the revenue.

According to the affidavit, 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 United States of America ports.

The plaintiff added that the undeclared shipments between January 2013 and December 2014 brought the total value of the entire shortfall to $406.75m.

The defendants were said to have failed to respond to a Federal Government letter through its legal representative, seeking clarification as to the discrepancies and government is therefore, seeking a court order to compel the two companies to pay $406.8m, being the total value of the missing revenue and interest payment at 21 percent per annum.

In addition, the government is also asking Shell to pay general exemplary damages in the sum of $406.75m as well as the cost of the legal action.

The Federal Government had also sued Chevron, Total and Agip, in a similar case before the court.
The FG is asking for a total of $12.7bn over alleged non-declaration of 57 million barrels of crude shipped to the U.S. between 2011 and 2014.

The oil companies are among 15 oil majors targeted by the government for the recovery of $17bn in deprived revenue.


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