Nigeria may be heading for another billion-dollar arbitration as a debt-recovery firm is demanding $1,501,539,032 from the federal government over a botched contract, THISDAY has learnt.
The firm, Trobell International Limited, engaged by the Attorney-General of the Federation (AGF) and Minister of Justice, Abubakar Malami, in April 2018 to help recover an estimated $43 billion unpaid “oil profits” from multinational companies at a commission of five per cent, is threatening to sue the federal government.
However, federal government decided in October 2019 to step down the recovery process following a meeting of stakeholders after Trobell had issued demand notices to the oil companies.
According to TheCable, Trobell which was to pocket $2.15 billion as commission, is now claiming 50 per cent of the fee, saying it had already done significant work.
Nigeria is currently in international arbitration with P&ID over a botched oil and gas processing contract in which $9.8 billion including interest has been awarded against the country.
Also, Sunrise Power is making a $2.3 billion claim in arbitration against Nigeria over the Mambilla power project, although it has now entered into a $200million settlement.
Nigeria had, in 1993, signed production contracts with oil companies to explore deep offshore and inland basins, before changing the agreements to production sharing contracts (PSCs) in 1999.
Under various incentives in the novel arrangement, the profits payable to the federation were to be automatically reviewed upwards whenever crude oil hit the $20 per barrel mark or after a number of years.
However, these triggers were never activated and after years of campaign, the federal government decided in 2018 to engage Trobell as recovery agents on the additional revenue from profit oil due to the federation from PSCs.
On the other hand, the Attorneys-General of Rivers, Akwa Ibom and Bayelsa States had, in 2016, filed a suit against the AGF at the Supreme Court and sought to compel the Federal Government of Nigeria to review the PSC Act to recover arrears of revenue which would have accrued to the federation over the years.
On October 17, 2018, the Supreme Court gave a consent judgment following terms of settlement arrived at by all parties on April 5, 2018.
The apex court asked that a body be set up for the recovery of the outstanding profits.
After the Supreme Court judgment, the AGF set up a body made up Trobell International as lead/coordinating consultant and representatives of Rivers, Akwa Ibom and Bayelsa, as well as accounting and legal experts.
However, in March 2019, President Muhammadu Buhari asked that the April 2018 contract with Trobell be terminated because the recovery job could be done by the Department of Petroleum Resources (DPR) and the Federal Inland Revenue Service (FIRS) without any commission.