Global Gas opposes Shell’s $2.4bn sale, cites ongoing legal cases

• Published On: 25 December 2024 at 10:06

Global Gas and Refining Limited objected on Monday to the recent completion of the $2.4 billion Sale and Purchase Agreement between Shell and the Renaissance Consortium, revealing that the transaction was completed despite ongoing legal proceedings against the oil giant.

In a press briefing in Abuja, the company stated that, despite promising to hold off on action during the ongoing case, the oil giant received ministerial approval for the divestment of Shell Petroleum Development Company, describing the development as unwelcome.

Mr Kenneth Yellowe, Chairman of Global Gas and Refining Limited, argued that while the acquisition of significant assets by an indigenous company should normally be cause for celebration and national pride, blatantly disregarding a court injunction was not.

The federal government initially rejected Shell's plan to sell its onshore oil assets to a group of five companies known as Renaissance, citing, among other things, pending court cases. However, it reversed its decision months later and approved the transaction last week.

Yellowe stated that Global Gas had a long-standing contractual agreement with Shell that dated back to 1998, under which it made significant investments.

He stated that the facility was designed specifically to supply resources from the Cawthorne Channel Oil and Gas fields of OML 18, at a cost of approximately $0.5 billion.

The company stated that Shell began supplying rich gas to the plant in 2005, but the supplies dwindled over time, becoming sporadic and intermittent, eventually leading to Global Gas's closure.

"There is irrefutable evidence and proof that Shell deliberately chose to prioritise the international market over domestic gas supply obligations, and to fail to honour the legal existing obligations between Shell and Global Gas, thereby frustrating this business relationship and resulting in significant losses for Global.

"Specifically, Shell's refusal to declare the main gas start date under the terms of the gas processing agreement, which would have triggered its contractual responsibilities, was a calculated act of bad faith and internal documentation from Shell unequivocally reveals this intentional ploy to undermine this agreement, causing significant losses to Global Gas and its partners, jeopardising its operations," the business wrote.

During the lengthy legal battle, Global Gas stated that it learnt of the impending divestment and immediately sought court protection by filing a motion for an injunction to prevent the Nigerian Upstream Petroleum Regulatory Commission from granting the necessary ministerial approval.

The company stated that the court ordered the parties to meet and discuss amicable settlement options, emphasising that Global Gas had followed the court's instructions.

Yellowe displayed court documents to back up his claim, expressing the company's disbelief that the upstream regulator, despite swearing an affidavit and providing an undertaking regarding the injunction in relation to the appellant/applicant's motion filed on September 2, 2024, had inexplicably granted consent, in direct violation of the court order.

"This defiance not only undermines the rule of law, but it also establishes a dangerous precedent for corporate governance in Nigeria. "The abrupt and illegal approval of this divestment during ongoing negotiations is an affront to justice and fairness," Global Gas stated.

Global Gas urged Nigeria's government, regulatory authorities, and international stakeholders to hold Shell accountable for its actions, emphasising the critical need for stricter enforcement of court rulings and increased oversight of multinational corporations operating in Nigeria.

"Global Gas continues to pursue all legal avenues to protect its rights and investments. It also expresses solidarity with other organisations and communities affected by Shell's actions.

"We are fighting for justice, fairness, and the rule of law. Shell's impunity must end. "We encourage all stakeholders to join us in demanding accountability and fairness for the Nigerian people," the company stated.

Global Gas insisted that Shell's asset sale should not come at the expense of the many communities and commercial entities, including Global Gas, that have outstanding issues with SPDC.

A few days ago, Renaissance Africa Energy Company Limited announced that the Minister of Petroleum Resources had approved the sale of SPDC to the group.