The Commercial Court Division of the High Court in London has granted an interim injunction restraining the partners in the Aje Oilfield, offshore Lagos from implementing a resolution passed for drilling two additional wells and exercising any rights under the default provisions of the Joint Operating Agreement (JOA) of the Oil Mining Lease (OML) 113.
A Norwegian firm and one of the partners, Panoro Energy, which dragged the other partners to the London court, has also filed a request for arbitration with the secretariat of the International Chamber of Commerce.
Panoro, through its fully owned subsidiary, Pan Petroleum Aje Limited (PPAL), holds 6.502 per cent participation interest in OML 113.
Folawiyo Aje Services Ltd (FASL), a wholly owned subsidiary of Yinka Folawiyo Petroleum, is the operator of the field, which commenced crude oil production on May 3, 2016
Other partners include: New Age Exploration Nigeria Limited, Pan Petroleum, Energy Equity Resources (EER) Nigeria Limited and PR Oil and Gas Nigeria Limited.
The partners earned their first income after the sale of the first oil in October 2016.
London-based Panoro had confirmed that its net share of proceeds from the sale before payment of royalties and taxes was $3.5 million, while one of the partners, London-based MX Oil confirmed that it received $1.2 million from the sale through PR Oil and Gas Limited, the holder of its investment in OML 113.
The dispute between the partners followed the passing of resolutions by the JV partners with respect to a proposed new well to be drilled and the related cash call to be paid by the partners.
While the Oslo-listed Panoro has said it has the financial ability to fully meet the amount of this disputed cash call, the company has, however, insisted that the drilling of any new well is premature at this stage.
Panoro has also argued that the decision to incur such additional capital expenditures at Aje would require unanimous consent of the joint venture partners in accordance with the JOA, and further alleged that there was no such consent before the decision to drill new wells was reached.
The company acknowledged that it was in disagreement with its JV partners regarding a cash call default notice and initiated legal proceedings and arbitration to protect its interests.
In order to prevent the other partners from taking actions that could affect Panoro’s continued participation in the OML 113, the company also dragged the JV partners to the Commercial Court Division of the High Court in London seeking an interim injunction in order to prevent the other joint venture partners from exercising any rights under the default provisions of the OML 113 JOA.
In its latest OML 113 update issued by the Chief Executive Officer of Panoro Energy, Mr. John Hamilton, the company announced that the London Court has granted the interim injunction against the JV partners.
“The court order has been received whereby PPAL has been granted an interim injunction. The other joint venture partners are now temporarily restricted from taking any action under the default provisions of the JOA that would prevent PPAL’s continued participation in the JOA and OML 113,” Panoro said.
“Panoro will seek to recover all losses, costs, expenses, compensation and damages in law and equity caused directly or indirectly by the joint venture partners’ breach of their contractual and equitable obligations. Panoro will also continue to take all necessary action to retain its equity participation in OML 113 and to preserve shareholder value,” the company added.
The company further stated that it has formally commenced dispute resolution proceedings with the OML 113 JV partners by filing a request for arbitration with the Secretariat of the International Chamber of Commerce.