Aiteo Eastern E&P Company Limited has reached a settlement with Africa Finance Corporation (AFC), Shell Western Supply and Trading Limited, and eleven industrial banks and monetary establishments over disputes bordering on Oil Mining Lease (OML) 29 and related mortgage amenities price over $1.9 billion prolonged to Aiteo by the lenders.
The phrases of settlement, dated April 2026 and solely reviewed by Nairametrics (marked SUIT NO. FHC/ABJ/CS/1168/2024), have been permitted as a consent judgment by Justice Emeka Nwite of the Federal High Court, Abuja, on October 16, 2026.
The high-profile case centred on fee obligations, calls for by the banks and the intervention of presidency establishments on the time, together with NNPC Upstream Investment Management Services (NUIMS) and the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).
What we find out about OML 29 and the financial institution amenities
According to the phrases of settlement seen by Nairametrics, Aiteo Eastern E&P Company Limited and Shell entered into an Amended and Restated Agreement dated December 31, 2016, beneath which industrial banks, together with First Bank of Nigeria, Ecobank, GTBank and Union Bank, permitted two amenities totalling $1,977,680,000 for Aiteo.
- On October 23, 2019, AFC, Shell and the banks issued a requirement letter to the plaintiff, Aiteo, requesting fee of $288,443,235.70 due beneath the 2 facility agreements.
- To facilitate reimbursement of the amenities, the events initially agreed that Shell would offtake Aiteo’s share of crude oil produced beneath its 45% curiosity within the OML 29 three way partnership, pursuant to an Offtake Agreement and a Sale and Purchase Agreement (SPA).
- NUIMS subsequently notified Aiteo that, pursuant to a directive from the NUPRC, it could limit (ring-fence) all subsequent proceeds from Aiteo’s fairness cargoes for the settlement of accrued authorities money owed, money name arrears and crude dealing with prices.
- To facilitate the SPA transaction, Aiteo requested the lenders to offer sure ensures required by NUIMS and amend the Offtake Agreement between Aiteo and Shell.
- Following Aiteo’s request, the lenders wrote to NNPC Limited, notifying it that their curiosity within the plaintiff’s fairness cargoes, arising from the facility agreements and the All-Assets Debenture, had since crystallised.
In the letter, the lenders argued that the SPA transaction would put Aiteo ready the place it could be unable to fulfill its fee obligations to them, in the end leading to a damaging affect on the Nigerian monetary sector.
Consequently, the lenders, NUPRC, NUIMS and Aiteo agreed to discover “an alternative solution” that might guarantee authorities obligations have been met with out breaching commitments to the lenders.
While discussions have been ongoing, Aiteo instituted an motion towards the defendants (AFC, Shell and the banks) on the Federal High Court, Abuja.
Court proceedings and settlement strikes
According to the swimsuit reviewed by Nairametrics, Aiteo’s authorized workforce, led by Chief Wole Olanipekun, SAN, and Dr Onyechi Ikpeazu, SAN, sought varied declaratory and injunctive reliefs towards the defendants.
These included a declaration that not one of the defendants was the holder or operator of OML 29 or licensed to carry a mining lease and have interaction in upstream petroleum operations.
Aiteo secured a beneficial ruling on August 19, 2024, when the court docket granted interim orders of injunction towards the defendants.
Justice Nwite restrained the defendants from relating with any particular person as if they have been the operators of OML 29.
- The decide additionally granted “an order restraining the defendants from acting in any way or taking any steps that would prevent the plaintiff from meeting its statutory obligations arising from OML 29, including payments relating to the CHA, cash calls, royalties, taxes and other statutory obligations under the Petroleum Industry Act (PIA) 2021.”
The banks subsequently filed a movement urging the court docket to put aside the interim injunction on the grounds of lack of jurisdiction.
However, the events finally determined to settle the dispute and compromise the swimsuit.
- They subsequently entered into phrases of settlement and forwarded them to the court docket.
- The phrases of settlement acknowledged that the “Parties respectively agreed to settle the dispute in this suit”.
The events agreed that the phrases of settlement can be remaining and binding and can be adopted by the court docket as its consent judgment.
Court approves consent judgment
On October 16, 2026, Justice Nwite noticed that the events had signed the phrases of settlement.
The decide subsequently adopted the settlement as a consent judgment of the court docket.
What you need to know
Recall that Royal Dutch Shell Plc introduced in 2015 that it had accomplished the sale of its pursuits in Oil Mining Lease (OML) 29 and the Nembe Creek Trunk Line (NCTL) within the japanese Niger Delta to Aiteo Eastern E&P Company Limited for roughly $1.7 billion.
OML 29 subsequently grew to become the topic of litigation, largely involving disputes over financial institution loans and associated monetary obligations.
