The Federal High Court in Lagos has issued an order barring any actions against General Hydrocarbons or its assets over a debt incurred by Atlantic Energy Drilling Concept Nigeria Limited.
The court directed the restraining order at the Asset Management Corporation of Nigeria (AMCON), its managing director, First Bank of Nigeria (FBN) Limited and the Attorney General of the Federation (AGF), who are all sued in a new suit filed by General Hydrocarbons.
The court also issued an order barring the four defendants from taking any steps or continuing any moves to enforce any rights against the energy firm or its assets.
The rights, the court said, include “but not limited to freezing the accounts of the applicant, its directors or shareholders, the appointment of a receiver/receiver manager, asset manager, recovery agent, etc., over the applicant, the applicant’s assets, or the assets belonging to the applicant’s directors or shareholders.”
The judge, Ambrose Lewis-Allagoa, granted the temporary injunctions on Tuesday, pending the hearing and determination of the motion on notice in a fresh suit filed on Monday by General Hydrocarbons.
The judge then adjourned the matter until 22 October for the hearing of General Hydrocarbons’ motion seeking a more lasting restraining order.
General Hydrocarbons is owned by Nduka Obaigbena, the chairman of THISDAY Group.
According to court documents obtained by PREMIUM TIMES, the debt in question was incurred by Atlantic Energy Drilling Concept to First Bank, resulting in a deficit of US$718 million in the books of the lender, which was purchased by AMCON as an eligible bank asset.
The matter revolved around the crude oil aboard the FPSO Tamara Tokoni, which General Hydrocarbons had pledged to First Bank as security for loan facilities.
In March, the Federal High Court, Port Harcourt, dismissed First Bank’s claims accusing General Hydrocarbons of diversion of the proceeds from the sale of crude oil pledged as collateral for loan facilities.
But about two weeks ago, First Bank recorded a victory in the case, with the Court of Appeal setting aside the Federal High Court, Port Harcourt Division’s decision.
The court granted First Bank’s appeal, directing the crude oil to be sold and that the proceeds be lodged in an interest-bearing escrow account under the custody of the Chief Registrar of the court.
Meanwhile, on Monday, General Hydrocarbons filed a fresh suit at the Federal High Court in Lagos seeking a declaration that AMCON “can only take enforcement measures against Atlantic Energy drilling Concept Nigeria Limited or First Bank,” by virtue of “the Loan Purchase and Limited Servicing Agreement between the defendants.”
The judge, Mr Lewis-Allagoa, ordered AMCON and its co-defendants on Tuesday to halt any enforcement actions against General Hydrocarbons and its assets pending the hearing and determination of the firm’s motion. The order is the latest in the series of court interventions in the matter, widening the scope of the legal processes that the loan disputes have thrown up.
Background
In 2011, Atlantic Energy Drilling Concepts, chaired by Jide Omokore, an associate of a former Minister of Petroleum Diezani Alison-Madueke, took a loan facility from First Bank.
The $490 million loan was to fund the company’s operating and capital expenditure requirements for the drilling of four oil wells with proven reserves (together known as the Forcados assets) as well as its Strategic Alliance Agreement with the Nigerian Petroleum Development Company (NPDC).
The loan was secured with Atlantic Energy’s assets and rights through the agreement, while First Bank had charge over the company’s collection accounts.
The facility later turned problematic, following Atlantic Energy’s payment defaults.
“In line with our commitment to address the legacy asset quality challenges, exposure to Atlantic Energy, our biggest NPL (non-performing loan), was written off in the second quarter,” Adesola Adeduntan, First Bank former CEO said in 2019.
According to its earnings report, First Bank was able to reduce its non-performing loan ratio to 14.5 per cent as of June 2019 from 25.3 per cent after writing off the N126 billion loan.
Mr Oba Otudeko, then chairman of FBN Holdings, later sought Mr Obaigbena’s help to salvage First Bank from a potentially disastrous situation, prompting the duo to agree to work together, according to Mr Obaigbena, who held an approved oil mining lease (OML) from former President Umaru Yar’Adua.
In 2020, Mr Obaigbena arranged a meeting between Mr Otudeko, the then chairman of FBN Holdings and Mele Kyari, the managing director of NNPC Limited.
In a letter written to Yemi Cardoso, the governor of the Central Bank of Nigeria, dated 7 November 2024 and seen by PREMIUM TIMES, Mr Obaigbena argued that the NNPC under the late Maikanti Baru, then GMD, had refused to sign the security documents for the now bad, non-performing loan to Atlantic Energy Drilling Concept Nigeria Limited (Atlantic Energy) for OML 26, OML 42, OML30 and OML 34 under separate Strategic Alliance Agreements between Atlantic Energy and NPDC Limited, claiming it was a fraudulent scheme to defraud the Federal Government by the then Minister of Petroleum Resources, Diezani Allison-Madueke.
He noted that it was obvious during the meeting, which he claimed to be part of, that the facilities granted to Atlantic Energy by First Bank did not follow due process.
“FBN was now faced with an unsecured and non-performing exposure of $718M and was on the verge of becoming a systemic risk to the banking sector,” he stated.
“It was discovered that FBN had given this loan recklessly without security as part of a scheme that funded Diezani Allison-Madueke and Kola Aluko, (details of these are still being investigated by Nigeria’s Economic and Financial Crimes Commission “EFCC” and the United Kingdom’s National Crime Agency “NCA”),” Mr Obaigbena added.
Consequently, Mr Obaigbena said former President Muhammadu Buhari approved the licence, resulting in OMLs 120 and 121 being granted to General Hydrocarbons in 2021.
Following a series of meetings between First Bank and General Hydrocarbons, he said there was an agreement based on the fact that he held a valid OML award that First Bank would finance the optimum exploration, development and production of OML 120.
Part of the terms, he added, was that General Hydrocarbons would share the profit equally with First Bank over eight years to help the latter “reduce the holes in their books” caused by their bad loans, especially the facilities availed to Atlantic Energy.
“However, we made it clear that we are not Atlantic Energy and would never assume their obligations which was then being pursued by AMCON and EFCC and our central role was to assist FBN return to good standing with a totally different transaction structure as GHL has no nexus with Atlantic Energy.”
The letter stated that First Bank sold its outstanding exposure as an Eligible Bank Asset (EBA) to AMCON at a discount to be paid off by its share of profit from the deal it earlier reached with General Hydrocarbons.
It added that the lender agreed to a clawback provision with AMCON, meaning that in the event that the outstanding exposure was not paid, AMCON would recover the EBA from First Bank’s books.
Mr Obaigbena stated that First Bank, AMCON and General Hydrocarbons signed an outstanding exposure tripartite deed allowing Global Hydrocarbons to guarantee payment of a pending of a now discounted outstanding exposure of $600 million in naira on the books of the bank.
“Once GHL signed the Outstanding Exposure Tripartite Deed effective 31st December 2021, FBN’s account which was then classified by the Central Bank of Nigeria (CBN) was now whole again having escaped a loan loss provision of 302Bn Naira against a profit of 151Bn Naira ultimately declared for the year ending 31st December 2021,” the document stated.
“Had GHL not signed and guaranteed the EBA to AMCON, FBN’s loss for 2021 would have been 161Bn Naira, a whopping amount for the financial sector at that time, when the exchange rate was N400 – $1 having regard to the fact that this loan had been classified and non-performing since 2015 (six years before).”
Mr Obaigbena alleged that the bank put stumbling blocks in the financing of the development of OML 120, violating the outstanding exposure tripartite deed.
More than seventy utilisation requests made by General Hydrocarbons in respect of the facility took First Bank between seven and 67 days to pay instead of five days, he added, causing significant losses to Global Hydrocarbons.
“FBN’s reluctance to pay as at when due started soon after consultants appointed and working for FBN and AMCON started making demands of GHL for “fees” not connected with the transaction. Indeed, GHL told the consultants that this would amount to bribery and corruption (we have evidence).”
“Since FBN got its way and avoided the 160Bn Naira loss following GHL’s signing of the Outstanding Exposure Tripartite Deed and with its account now performing, FBN has failed, refused and/or declined to perform its obligations under the MOU and the Outstanding Exposure Tripartite Deed, contributing to GHL’s loss of the Blackford Dolphin drill ship for which we are currently facing claims of over $100M (One Hundred Million Dollars) now in Arbitration.”
The document further noted that Global Hydrocarbons requested a $53 million facility from First Bank on on 28 August 2024, which was granted two months after by which time the lender “smuggled in a new variable of the appointment of an Independent Asset Manager” under a framework agreement that sought to effectively replace key components of the foundational MOU, unknown to the Tripartite Deed between AMCON, FBN and GHL and also unknown to the Petroleum Industry Act.
Mr Obaigbena alleged the framework document intended to give First Bank full control over OML 120.
“Mr. Governor, we have been left with no choice but to go to court and arbitration to preserve our fundamental rights and our rights under the agreements in the face of FBN’s attempts to clubber and bully us out of existence,” he said.
“We are seeking to enforce the provision of our MOU which allows us to raise finance independent of FBN when they fail to do so, for which they have failed abysmally. After over three and half years (3.5) years, all we have received from FBN is bad faith.”
General Hydrocarbons has stated that it has no relationship with the original debtor, Atlantic Energy and is not involved in the debt resulting from the separate strategic alliance agreements between Atlantic Energy and First Bank.
