By John Ikani
Shell Plc, ExxonMobil Corporation, Chevron Corporation, and Equinor ASA have said they will withdraw their lawsuits of about $3 billion, against the Nigerian National Petroleum Company (NNPC) Limited after signing a contract extension on production sharing agreements.
Shell Plc, ExxonMobil Corporation Chevron Corporation and Equinor ASA disclosed this in letters to two New York federal judges on August 22, 2022, Bloomberg reported on Wednesday.
The development comes days after NNPC Limited signed a contract extension with the oil majors. The firm had on 12 August signed a contract extension with its international partners for five major oil blocs.
The agreement according to NNPC Limited could put to an end the protracted dispute between the state-owned company and the contractor parties in Oil Mining Leases (OMLs) 128, 130, 132 and 133, as well as 138 PSCs.
“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,” letters to two New York federal judges showed.
Once that happens, the companies “expect to withdraw this action,” the letter said. Exxon and Shell anticipate being able to do the same after 60 days, they said in a separate letter.
Recall that in 2017, Equinor and Chevron filed a suit in the US, asking a court to enforce a $1.1 billion award issued by an arbitration tribunal against NNPC in 2015.
Shell and Exxon initiated similar proceedings in New York in 2014 over a $1.8 billion arbitration award.
Both penalties followed allegations by the oil majors that the NNPC took crude beyond its entitlement under 1993 PSC contracts, designed to incentivise the companies to develop deep offshore blocks.
