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Eni S.p.A accuses Nigeria, US litigation funder of lack of transparency

Eni S.p.A accuses both Nigeria and US investment firm of lack of transparency in its in a long-running dispute over a 2011 transaction.

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Eni S.p.A has accused both Nigeria and US investment firm assisting the country with its litigation against the Italian oil giant and Royal Dutch Shell of lack of transparency in the $1.1 billion energy deal.

The Italian oil firm is seeking documents from the US investment firm helping Nigeria in the criminal corruption trial.

Eni S.p.A claim that undisclosed interests are driving the Nigerian government’s litigation strategy at the expense of Eni’s contractual rights and the national interest of Nigeria. The Italian oil company wants permission to subpoena information from the investment firm, Drumcliffe Partners LLC to help it file its defense in the corruption trial in Milan, which Nigeria has joined as a civil party.

This is the latest episode in a long-running dispute over a 2011 transaction, which set Nigeria against the 2 oil companies. The bribery case revolves around the purchase of OPL 245 offshore field, some 150 km off the Niger Delta, for about $1.3 billion from Malabu, a company owned by former Minister of Petroleum, Dan Etete.

Eni, in a memorandum filed in a US district court in Wilmington, Delaware, on October 6, said that Nigeria’s government initially supported Eni’s plans for developing its offshore permit known as Oil Prospecting License 245, but subsequently elected to wage a “multi-jurisdictional litigation campaign” against the company.

The Italian oil firm said it now has reasons to believe Nigeria’s actions are driven by third parties seeking to earn illicit profits and has applied for authorization to request that seven Delaware-registered Drumcliffe companies produce documents on the arrangements they set up for Nigeria’s OPL 245 litigation.

Drumcliffe’s Principal, Jim Little said, “We look forward to discrediting Eni’s conspiracy theories and wild innuendos. The application to the court is entirely baseless.’’

Shell and Eni have been on trial in Milan since 2018. Italian prosecutors say the companies obtained the permit 9 years ago by paying almost $1.1 billion into an escrow account for the Nigerian government. Prosecutors allege that most of those funds were siphoned off to politicians and middlemen with a huge part of it going to Etete himself.

Backstory

It was reported that the Nigerian government, through its lawyer, Lucio Mucia, at a hearing into the alleged corruption linked to Eni and Shell’s acquisition of OPL 245, called for a guilty verdict and an advance payment of about $1.1 billion for damages in one of the oil industry’s biggest-ever corruption trials.

Eni and Shell have, however, denied any wrongdoing and say they acquired OPL 245 through legitimate agreements with the Nigerian government, which required settling Malabu’s outstanding claim to the block.

To litigate its OPL 245-related claims, Nigeria retained the Lagos-based law firm Johnson & Johnson, which then entered into a funding agreement with Drumcliffe, Eni said.

According to a memorandum from Eni, a Nigerian media outlet in August published what it said was the contract between the law firm and Drumcliffe. Certain clauses of the opaque and ambiguous deal indicated that the litigation funder could be entitled to as much as 35% of the funds recovered by the government or nearly $400 million in the case of the Milan trial.

Eni said it requires information from Drumcliffe to better understand the funding arrangement. Also, that the allegation that Drumcliffe may have financed a billion-dollar lawsuit against Eni, in exchange for an enormous and disproportionate economic return deserves clear answers, a spokesman for the Italian company said.

However, Drumcliffe and Johnson & Johnson deny allegations that the U.S. firm stands to collect a sizable portion of what the Nigerian government manages to recoup, and describes reports of such potential returns as false and sensational.

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Companies

MTN Nigeria declares largest ever revenue by a listed Nigerian entity for FY 2020

The strong revenue growth was basically due to its data-led segment as sales from the segment expanded by an impressive 51.5% Year to Year.

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MTN Nigeria recently announced another ground-breaking full-year turnover in the financial year of 2020, the highest ever recorded by a Nigerian listed entity.

Specifically, the telecom giant’s revenue expanded by 15.1% year-to-year to N1.3 trillion in the review period. The strong revenue growth was basically due to its data-led segment as sales from the segment expanded by an impressive 51.5% Year to Year.

  • Voice sales rose relatively by 5.6% year to year as the global switch to data-enabled communication subsisted.
  • MTN Nigeria Plc also announced a N5.90/share final dividend on impressive growth in its free Cash Flow for the financial year of 2020.
  • Notably, MTNN’s 4G network now covers 60.1% of the population compared to 43.8% in 2019.
  • According to MTN Nigeria, the suspension of new SIM registration enforced in mid-December did not have a material effect on the voice segment, which managed a 10.6% YoY revenue growth in Q4’20 (vs 7.0% YoY in Q3’20).

In contrast, data revenue growth notably moderated to 37.5% YoY in Q4’20 compared to 55.5% YoY in Q3’20.

In a research report released by CardinalStone, the most valuable telecom company’s margin was adversely affected by currency devaluation;

“Margins were adversely affected by the effect of naira devaluation and expenses associated with new sites’ roll-out to boost 4G network coverage in FY’20.

“On the former, we note that MTNN expanded the scope of its service agreement with IHS Holding Limited and changed the reference rate for converting USD tower expenses to NAFEX (vs CBN’s official rate previously). Thus, over the full-year period, the company’s operating margin contracted by 1.9 ppts YoY to 31.7%,” the report stated.

The company’s margin was also negatively affected by the higher cost of borrowing and the ultra-low rates prevailing at Nigeria’s debt market;

“Net finance cost increased by 25.4% YoY on the impact of higher borrowings and lower interest on investment in government securities.

“Borrowings rose by over 26.3% to N521.2 billion in FY’20, after the company notably issued its N100 billion Commercial paper in June 2020. The effect of higher borrowings combined with a tax increase (a consequence of lower investment allowance and exempt income) to keep after-tax profit growth subdued at 0.9% YoY.”

That being said, in spite of its impressive growth in revenue the Stock was trailing by 3.28% trading at N174 per share.

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ENERGY

Oil marketers say petrol will sell for N230 per litre in March

Oil marketers have insisted that petrol will sell for as much as N230 per litre in March.

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Oil marketers, on Sunday, said that Premium Motor Spirit (PMS) otherwise known as petrol is to sell for as much as N230 per litre in March.

This is coming against the background of insistence by the Nigerian National Petroleum Corporation (NNPC) that it has no plans to increase the price of petrol in March.

There has been a reported reappearance of queues at filling stations in some parts of Lagos and Abuja as panic buying and petrol hoarding occurs in some filling stations.

According to a report by New Telegraph, the National Operations Controller, Independent Petroleum Marketers Association of Nigeria (IPMAN), Mike Osatuyi, declared that the whole nation had crossed the bridge and that there was no hiding place for a hike in fuel price.

What the IPMAN top officials are saying

Osatuyi said, “I have just returned from a meeting in Abuja. What I have observed is that many stations have closed down and there are queues in many places in both Lagos and Abuja. Nigeria has crossed the bridge, there is no hiding place, the N1.2 trillion, which was hitherto annual spending on subsidy, will be borne by the market.

“As it is, the prices of crude oil have gone up to $67 per barrel and, with this, the price of PMS will be between N220 per litre and N230 per litre. I was told by someone that the Group Managing Director of NNPC told them that the official price is likely to be N206 per litre.

“As it is now, all the stations that have shut down their gates must have heard information before they took that action. I want us all to wait by tomorrow we will all see clearly what will happen. There have been annual spending of N1.2 trillion on fuel subsidy and now that the subsidy has said to be abolished, that money must come from somewhere.

’The money must be coming from somewhere. “NNPC is not an NGO (non-governmental organisation), there is no budgetary provision for subsidy again and instead of wasting it on subsidy, it should be deployed to other sectors,’’ he said.

On what can be done to cushion the negative effects of higher fuel price, Osatuyi said: “This plan to cushion the negative effects of higher fuel price should be the next important thing. The government can do the free conversion of vehicle from fuel to gas. This should be done to help Nigerians who will definitely be affected by this fuel price hike.”

On his part, the IPMAN National Public Relations Officer, Alhaji Suleiman Yakubu, condemned the panic buying and return of long queues at some filling stations within Abuja.

While assuring Nigerians that the normal supply of petroleum products would soon be restored with the commencement of loading at various depots, Yakubu said the increase in the global price of crude oil has affected the price of petrol.

He said, “We want to assure the buyers that government and marketers are doing everything possible to ensure that the products are available in every filling station within a few days starting from today (Sunday).’’

What you should know

  • The state oil giant, NNPC, had in a press statement on Sunday, assured Nigerians that despite the increase in the price of crude oil, it has no plans to increase the ex-depot price of petrol in the month of March. This is coming after it gave a similar assurance earlier in February, that it was not going to increase the price of the product in February.
  • NNPC explained that the decision was to allow ongoing engagements with organized labour and other stakeholders on an acceptable framework that will not expose the ordinary Nigerian to any hardship, to be concluded.
  • This uncertainty has led to hoarding of the product by depot owners and some retail marketers, which has led to the return of queues in some filling stations.
  • The Federal Government had in March 2020, announced the removal of fuel subsidy and full deregulation of the downstream sector of the oil industry, which will allow market forces to determine the price of the product.
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Coronavirus

How to register for Covid-19 vaccination in Nigeria

The NPHCDA has announced guidelines to register for COVID-19 vaccinations.

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The National Primary Health Care Development Agency, NPHCDA, has released guidelines on registering for Covid-19 vaccination in Nigeria.

The guidelines were announced Monday morning in a social media post and they are as follows:

Step 1: Visit https://nphcda.gov.ng/

Step 2: Click on ” covid-19 vaccination e-registration”

  • In the Registration Form for COVID-19 Vaccination you are to fill in; your full names, phone number, email address, date of birth, sex, the type of National ID you have, a residential address which states, the LGA of residence, ward of residence and preferred vaccination site.
  • You are meant to also select your preferred vaccination date and time slot, which ends with a photo update.

After doing the above steps, you will receive a message saying:

“Registration Completed! …Your Vaccination ID is:

Your data is successfully received.

Thank you for taking time to fill the form, you will receive an SMS and email shortly containing your Vaccination No. and other instructions.”

What you should know 

  • The Federal Government confirmed that the first tranche of Covid-19 vaccines will arrive in Nigeria on Tuesday, March 2, 2021.
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