—Submits report to AGF

By Henry Ojelu

The Legal Audit Committee on Associated Gas Development Projects and Arbitration Matters has submitted its final report to the Attorney General of the Federation and Minister of Justice, Prince Lateef Fagbemi, SAN,  warning of major legal and financial risks facing Nigeria’s gas sector due to poorly structured contracts and past arbitration missteps.

Chaired by Mr. Olasupo Shasore, SAN, the committee was inaugurated in November 2024 with a mandate to review gas-related agreements and memoranda of understanding, MOUs, signed in connection with Nigeria’s accelerated gas development agenda.

The objective was to align such contracts with the Nigerian Gas Master Plan and assess the country’s exposure to commercial and legal liabilities from previous transactions.

Speaking during the report presentation at the Federal Ministry of Justice in Abuja, Shasore, who is a Senior Partner at African Law Practice (ALP) NG & Co, said the report offers a deep audit of existing gas agreements and arbitration cases that have led to substantial costs for Nigeria.

He disclosed that the panel’s investigation uncovered significant legal vulnerabilities, primarily due to uncoordinated contract drafting, weak dispute resolution mechanisms, and a general lack of structured legal risk analysis in transactions involving international stakeholders.

“Past missteps in drafting and executing contracts have resulted in Nigeria being exposed to expensive arbitration disputes. This report recommends corrective measures that will protect national interest and reduce legal and financial exposure in future engagements,” Shasore said.

Shasore further noted that many of the past challenges stemmed from inadequate due diligence and a lack of cohesive strategy in contract negotiation and implementation.

“Our findings reveal that Nigeria has often entered into gas development agreements without fully assessing the long-term legal implications,” he stated.

Among the key recommendations of the panel is the establishment of a legal risk matrix—a preemptive tool designed to identify potential dispute triggers before contracts are signed.

The report also advocates for more robust inter-agency coordination, tighter oversight in contract approvals, and enhanced legal training for negotiators handling high-value energy deals.

The Attorney General, while receiving the report, commended the committee’s work, describing it as a bold step towards building stronger legal foundations in Nigeria’s gas sector.

He said: “This audit provides us with a clear roadmap for reforming our contractual frameworks. It will guide future engagements and help avoid repeating the costly mistakes of the past. This is an important contribution to our efforts to improve Nigeria’s economic and legal resilience.”

The audit committee, made up of seasoned legal, commercial, and industry professionals, conducted the review over a six-month period.

Their work involved examining existing agreements, evaluating arbitration outcomes, and consulting relevant ministries, departments, and agencies involved in the gas sector.

The audit’s findings are expected to influence how future gas development deals are structured, particularly those involving international investors and multilateral partners.