- Port-Harcourt-based oil and gas servicing firm, Eastline Energy Resources Limited, has initiated a class action lawsuit against Conoil Producing Limited over a $774,789 debt.
- The lawsuit is intended to be a class action lawsuit domiciled in the USA, as stated in a June 14 letter sent to various parties, including the President’s Chief of Staff, Femi Gbajabiamila, and members of staff of Conoil and the Nigerian National Petroleum Company Limited.
- Eastline Energy Resources Limited accuses Conoil Producing Limited of being one of the most notorious bad actors in Nigeria’s oil and gas industry, according to the letter signed by the company’s CEO, Obioma Chimechefulem.
Port-Harcourt-based oil and gas servicing firm, Eastline Energy Resources Limited, has initiated a class action lawsuit against Conoil Producing Limited over a $774,789 debt.
In a June 14 letter addressed to several parties including the President’s Chief of staff, Femi Gbajabiamila as well as members of staff of Conoil and the Nigerian National Petroleum Company Limited stated its intentions of a class action lawsuit domiciled in the USA against Conoil.
The letter, which was signed by the company’s Chief Executive Officer, Obioma Chimechefulem, accused Conoil Producing Limited of being one of the most notorious bad actors in Nigeria’s oil and gas industry.
Crux of the matter
According to the letter, Conoil Producing Limited has refused to pay Eastline Energy Resources for services rendered on some of its oil and gas assets. A part of the letter stated:
“We at Eastline Energy Resources Limited, an industry leader in a variety of oil and gas services, worked for Conoil at its OML 59 & OML 150 oil fields. The jobs were completed satisfactorily and as per the contract, a balance of $774,789 was to be paid to Eastline for services rendered.
“Conoil has used every measure to avoid paying us. One of the most notorious “bad actors” in the oil & gas industry is Conoil Producing Limited. The mere mention of the company’s name elicits fear, condemnation, and damnation.
For decades the Board and management of Conoil have deliberately and systematically destroyed the fortunes and livelihoods of many contractors that work for them. Conoil is synonymous with the word, “debt”.
“The company goes to extreme lengths, on purpose, to ensure that once it has retained a service from a contractor for a job, it ceases to pay any monies owed. We have it on good authority that it currently owes Total E&P Nigeria – $70 million, Halliburton – $30 million, Depthwize – $15 million, and Shelf Drilling -$20 million, to name a few-these do not take into account the billions of Naira owed to local contractors.”
The Way Forward
According to the company, it has decided to join a group of aggrieved foreign and local contractors in a class action lawsuit against Conoil which will be filed at the United States District Court, Southern District of New York. This is because Conoil has been known to subvert the course of justice of the legal system in Nigeria when cases are brought against the company.
A part of the letter also stated:
“Most lawsuits against Conoil in Nigeria are trapped in a legal quagmire. We are confident that our lawsuit in the United States will get us the justice we deserve.
“Please note that we are not the first company to take Conoil to court overseas-oil trading firm, Vitol, did so in 2009 in a United Kingdom court and won its case handily. Conoil as an organization is the poster child for corporate fraud at an unimaginable scale.”
Call for a review of Conoil assets
As stated in the letter, Eastline Energy Resources has called for an in-depth government review of Conoil and its non-producing assets, which it has held for years without production. Eastline claims that the OML 136 asset, which has been in Conoil’s possession since 1991, has not produced a drop of oil or gas.
Meanwhile, the OML 150 asset which was awarded to Conoil in 2007, has also not produced any hydrocarbons and the central flow station has been subjected to mismanagement & community attacks that have led to kidnappings and the loss of life.
The letter also highlighted OML 153 which was also awarded to Conoil in 2007, is yet to come into production, leading to loss of revenue to the Nigerian state. It also mentioned the OPL 257 awarded decades ago that is yet to be converted to an OML, despite being next to the Egina field which is effectively run by TotalEnergies.
Leadership Challenge
Eastline Energy Resources also accused Conoil leadership of being unfocused, nefarious, ill-equipped, and under-prepared for challenges. The letter also highlighted Jeffrey Tesler, a former lawyer, and convicted felon, of being a shadow director and advisor at Conoil for years.
According to the letter, Mr. Tesler was sentenced to 21 months in a US prison (Fort Dix, New Jersey) for his involvement in a $150 million bribery scandal. A part of the letter also stated:
“As part of the presidency’s promise to clean up the oil and gas sector, Conoil should be at the very top of this housekeeping and house-clearing exercise. One rotten fruit can contaminate an entire harvest.
“No organization is above the law or free of punitive measures for its unjust actions. This letter will be part of the class action lawsuit filed against Conoil at the United States District Court in New York.”
