Home » Headline » Tunde Folawiyo & Partners at war over Lagos oilfield
Tunde Folawiyo & Partners at war over Lagos oilfield
Lagos State Governor, Mr. Akinwunmi Ambode (right), receiving a sample of the Crude Oil discovered in the State by the Group Managing Director, Yinka Folawiyo Petroleum Company Limited, Mr. Tunde Folawiyo during a courtesy visit to the Governor, at the Lagos House, Ikeja on Monday, May 16, 2016.

Tunde Folawiyo & Partners at war over Lagos oilfield

Tunde Folawiyo, the GMD/CEO of Yinka Folawiyo Group is not happy with the sstate of progress at the Aje oil field following court cases iby some of its parrtners.

Its subsidiary, Yinka Folawiyo Petroleum Company Limited, a wholly owned indigenous firm, is the operator of the OML 113. Other partners are New Age Exploration Nigeria Limited and PR Oil & Gas Nigeria Limited (the holder of MX Oil’s investment in the field)

First to go to court in December  was Panaro Energy which declared that it was in disagreement with other Joint Venturw partners over cash calls and was seeking arbitration, now another partner, EER (Colobus) Nigeria Limited, has gone to court.

 

Panaro holds 6.502 per cent participation interest in Oil Mining Lease 113, where the Aje field is located, through its subsidiary, Pan Petroleum Aje Limited.

The commercial court division of the High Court in London granted the PPAL an interim injunction, restricting the JV partners from taking any action under the default provisions of the Joint Operating Agreement that would prevent the PPAL’s continued participation in the JOA and OML 113.

Panoro Energy said in a new update that the EER (Colobus) Nigeria applied for and, on July 13, 2017, was granted an order by the Federal High Court of Nigeria, adding that the court set the time to hear the motion on notice as July 24, 2017.

It said, “It is Panoro’s understanding that the EER, like Pan Petroleum, is in default of certain of its cash calls under the JOA and, therefore, the court’s order restrains any of the non-defaulting joint venture partners from issuing a notice under the JOA requiring the EER and, perhaps Pan Petroleum, to withdraw from and transfer all its interests and rights in the OML 113 and the JOA to all the non-defaulting parties.”

According to the company, under the JOA, the potential consequence of a JV partner not making payment of its share of a cash call on or before the expiry of the 45-day grace period is that two or more of the other JV partners, who are not themselves in default and represent a majority of the interests not in default, have the option to require the defaulting party to withdraw from the OML 113 and the JOA by issuing a notice of withdrawal.

“However, any such action may currently be prevented by the Nigerian injunction referred to above,” Panoro said.

It said, “Should Pan Petroleum in future be issued with a withdrawal notice, it will vigorously dispute its forced withdrawal from the OML 113 and the JOA, and will explore all legal and diplomatic avenues to ensure the notice is withdrawn or the withdrawal is held to be unenforceable.

“Although Panoro has sufficient funds available, Pan Petroleum has at this time not paid its share of certain cash calls under the JOA. The 45-day grace period permitted under the JOA has now expired and Pan Petroleum continues to be in payment default. Pan Petroleum’s share of these unpaid cash calls currently stands at approximately $6.8m net of crude entitlements.”

Pan Petroleum said many of the cash calls that had been made were made in a manner inconsistent and prohibited by the JOA procedures, adding that an external audit of the JV’s procedures and accounting had been commissioned.

This whole brouhaha is troubling for Folawiyo because first oil was achieved on the Aje field in May last year, 20 years after it was discovered.And just as it was getting set to hit higher steides these disputes have put spanner inner works.

The Aje field is believed to hold significant resources of gas and the partners are therefore currently considering whether it would be more appropriate for the next stage of the field development to focus on gas production rather than drilling additional oil wells.

 

Leave a Reply

Your email address will not be published.

%d bloggers like this: