The federal government of Nigeria has sued Shell
Petroleum Development Company of Nigeria Limited
and its allied Shell Western Supply & Trading Limited for
nearly $407 million as part of its battle to recover all monies
siphoned through undeclared/under-declared lifting of the
nation’s crude oil.
The government says $406,751,070 is the total sum of the
missing revenues from the shortfall/undeclared/under-
declared crude oil shipments of the government, including
interest on the money.
The government has so far filed 15 separate suits against 15
oil companies at the Federal High Court in Lagos.
In an amended statement of claim filed before the court by
Professor Fabian Ajogwu, a Lagos lawyer, and accompanied
by the sworn affidavit of three United States-based
professionals, the government alleged that sometime in
2014, it experienced a decline in the revenue derived from
the export of crude oil. The ensuing investigation showed
that the decline was partly attributable to un-declaration and
under-declaration of crude oil shipments by some major oil
and gas companies operating in Nigeria.
The three professionals employed by the Federal
Government of Nigeria are:
Professor David Olowokere, a US citizen who is the lead
Analyst at Loumos Group LLC, a technology and oil and gas
auditing firm based in United States of America;
Jerome Stanley, a counsel in the law firm of Henchy &
Hackenberg, a law firm the USA and head of the legal team
engaged by Loumo Group LLC; and
Micheal Kanko, a citizen and resident of the state of
Arizona, also in the USA, who is the founder and the current
Chief Executive Officer of Trade Data Services Company.
The Nigerian government used the consortium of experts for
the intelligence-based tracking of the global movements of
the country’s hydocarborns, including crude oil and gas, with
the main purpose of identifying the companies engaged in
the practices that had led to missing revenues from crude oil
and gas exports sales to different parts of the world.
In reconciling the export records from Nigeria with the
import records from respective ports of entry in the USA in
the case of the two Shell companies and others, the Data on
shipment of the company, including its Bills of lading, Oil
Vessels name used for the shipment, date of arrival at the
destination ports, ports of origin, were used to identify the
buyers of the undeclared Nigerian crude oil, and the sellers
thereof, as well as quantity of crude oil exported
from Nigeria. The same data for the same shipment
imported into the United States were compared, and the
comparison showed that the crude oil shipments declared to
have been exported from Nigeria was less than what was
declared to have been imported into the US, using the same
shipment by the same vessel on the same bill of lading while
on the other hand, some other shipments were not declared
by the defendants to the requisite authorities, particularly
the pre-shipment inspection Agents. In some instances, the
crude oil shipments were completely undeclared.
The Nigerian government alleged further that all crude oil
and gas shipments/exports from Nigeria are required to be
declared and inspected by pre-shipment agents appointed
by the Central Bank of Nigeria of revenue due from the
crude oil shipments. The inspection records are to be
deposited with the Ministry of Finance.
The government averred that high-technology information
systems, including satellite tracking systems, were deployed
by the consultants in gathering the various validated
information establishing the shortfalls in the export
declarations and the import declaration in the country of
The plaintiff averred that:
On the 6th of January 2013, the defendants lifted crude oil
on board and using a vessel named AUTHENTIC, shipped
same to BP Oil Supply of 28301 Ferry Road, Warrenville,
Illinois, USA at the port of Chester, Pennsylvania, United
States of America with Bill Lading number
ALMYSVDM161212A3. That shipment was however not
declared to the relevant authorities, resulting in a shortfall
of 660,712 barrels of crude oil in the value of $72,678,320 as
revenue to the Government.
On January 3rd, 2013, the defendants lifted crude oil that
resulted in the shortfall of 979,031 barrels of crude oil in the
value of $107,693,410.
On the 14th of December, 2014, the defendants lifted
crude oil using a vessel named EAGLE TUSCON, and shipped
same to Shell Deer Park of 5900 Texas 225, Deer Park,
TX77536, USA through the port of Houston, Texas, USA, with
Bill of Lading number AETK0909US14; with the shipment
undeclared to the relevant authorities, resulting in a
shortfall of 499,048 barrels of crude oil in the value of
$54,895,280 as revenue to the Federal Government.
The defendants were also alleged at three different times on
board three different ships: EAGLE TUSCON, EAGLE SEVILLE,
and OVERSEAS EVERGLADES, shipped crude oil that resulted
in a shortfall of 3,697,737 barrels of crude oil in bringing the
total value of all the shortfalls to $406,751,070.
On January, 21, 2016, the Federal government through its
legal representative, wrote a letter to the defendants
drawing their attention to the above discrepancies and
requesting them to explain with specific documentation to
clarify the discrepancies as a prelude to the repayment of
the revenues and debt they now owe the government. Up
until now, the government said it has not received from the
defendants any payment pursuant to the said letter, or
received the requested documents.
The government further averred that it has suffered huge
and enormous financial losses as a result of the defendants’
under-declaration of the value of the crude oil they lifted
and exported to the USA.
Consequently, the Shell Petroleum Development company
of Nigeria Limited and Shell Western &Trading Limited
action has not only hindered economic development in the
country but has also undermined the sustainable economic
development of the Nigeria for the benefit of its people.
The government’s claims against the two companies
severally and jointly are as follows:
An order of the court compelling the two companies to pay
into the Federal government of Nigeria account with the
Central Bank of Nigeria, the total sum of USD 406,751,070,
being the total value of the missing revenue from the
shortfall /undeclared/under -declared crude oil shipments of
the country, made by the companies to USA;
Interest against the defendants at the rate of 21% per
annum on the sum of $406,751,070 until the entire sum is
General exemplary damages in the sum of $406,751,070;
The cost of instituting the legal action.
The presiding judge, Mojisola Olatoregun Isola, adjourned
the suit to 20th of October, 2016.