Nigerian Court gives Shell and Global Gas January 22 to ‘settle’ 2002 Gas Processing Agreement Terms 

Justice Inyang Ekwo scheduled the new date on Monday after both parties informed the court that settlement discussions were still ongoing since the last adjourned date, September 23, 2024, in the lawsuit filed by Global Gas’s legal team.

The applicant seeks an order restraining the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) from “approving, authorizing, consenting to, or otherwise granting permission for the $1.3 billion sale/divestment of the assets of the 1st Respondent (SPDC) to Renaissance Consortium.” 

The Executive Chairman of Global Gas, Mr. Ken Yellowe, had stated before the court that his company initiated arbitral proceedings against Shell, alleging that it failed to supply wet gas in line with the terms of the Gas Processing Agreement dated March 15, 2002.

“In the event of such a scenario, the Applicant will be without any remedy for settling the ongoing dispute over the breach of the 1st Respondent’s obligations to supply Rich Gas to the Applicant as agreed in the GPA dated March 15, 2002. 

“The instant application for an Interim Measure of Protection merely seeks to preserve the Applicant’s rights against the intended divestment/sale of SPDC’s onshore facilities, as publicly announced by its parent company, Shell PLC,” Yellowe stated in an affidavit.

He further stated that the applicant’s claims are for liquidated sums, specifically a compensation figure for an alleged breach of contract, and if the claim is upheld by the courts, the SPDC, as a corporate entity, is capable of paying the compensation to the applicant.

At the resumed hearing on Monday, Ikweato informed the court that his client is awaiting Shell to finalize its side of the agreement terms.

He also directed that when Shell and Global Gas exchange correspondence regarding their settlement moves, the NUPRC must be copied.

In 2021, Shell announced its intention to divest its Nigerian onshore assets due to the incompatibility of its long-term energy transition strategy with the operational challenges in Nigeria, such as theft and oil spills.

However, civil society groups, led by Amnesty International, called on the Nigerian government to block Shell Plc’s proposed sale of its onshore oil business in Nigeria.

In October 2024, NUPRC reportedly rejected the proposed $1.3 billion sale of onshore oilfields to the Renaissance Group, citing the buyer’s lack of qualification to manage the assets, according to a Reuters report.