EXCLUSIVE: OML 29: Aiteo, Shell, AFC, banks settle ‘$1.9bn’ facility dispute

Aiteo Eastern E&P Company Limited has reached a settlement with Africa Finance Corporation (AFC), Shell Western Supply and Trading Limited, and eleven commercial banks and financial institutions over disputes bordering on Oil Mining Lease (OML) 29 and associated loan facilities worth over $1.9 billion extended to Aiteo by the lenders.

The terms of settlement, dated April 2026 and exclusively reviewed by Nairametrics (marked SUIT NO. FHC/ABJ/CS/1168/2024), were approved as a consent judgment by Justice Emeka Nwite of the Federal High Court, Abuja, on October 16, 2026.

The high-profile case centred on payment obligations, demands by the banks and the intervention of government institutions at the time, including NNPC Upstream Investment Management Services (NUIMS) and the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).

What we know about OML 29 and the bank facilities

According to the terms of settlement seen by Nairametrics, Aiteo Eastern E&P Company Limited and Shell entered into an Amended and Restated Agreement dated December 31, 2016, under which commercial banks, including First Bank of Nigeria, Ecobank, GTBank and Union Bank, approved two facilities totalling $1,977,680,000 for Aiteo.

• On October 23, 2019, AFC, Shell and the banks issued a demand letter to the plaintiff, Aiteo, requesting payment of $288,443,235.70 due under the two facility agreements.
• To facilitate repayment of the facilities, the parties initially agreed that Shell would offtake Aiteo’s share of crude oil produced under its 45% interest in the OML 29 joint venture, pursuant to an Offtake Agreement and a Sale and Purchase Agreement (SPA).
• NUIMS subsequently notified Aiteo that, pursuant to a directive from the NUPRC, it would restrict (ring-fence) all subsequent proceeds from Aiteo’s equity cargoes for the settlement of accrued government debts, cash call arrears and crude handling costs.
• To facilitate the SPA transaction, Aiteo requested the lenders to provide certain guarantees required by NUIMS and amend the Offtake Agreement between Aiteo and Shell.
• Following Aiteo’s request, the lenders wrote to NNPC Limited, notifying it that their interest in the plaintiff’s equity cargoes, arising from the facility agreements and the All-Assets Debenture, had since crystallised.

In the letter, the lenders argued that the SPA transaction would put Aiteo in a position where it would be unable to meet its payment obligations to them, ultimately resulting in a negative impact on the Nigerian financial sector.

Consequently, the lenders, NUPRC, NUIMS and Aiteo agreed to explore “an alternative solution” that would ensure government obligations were met without breaching commitments to the lenders.

While discussions were ongoing, Aiteo instituted an action against the defendants (AFC, Shell and the banks) at the Federal High Court, Abuja.

Court proceedings and settlement moves

According to the suit reviewed by Nairametrics, Aiteo’s legal team, led by Chief Wole Olanipekun, SAN, and Dr Onyechi Ikpeazu, SAN, sought various declaratory and injunctive reliefs against the defendants.

These included a declaration that none of the defendants was the holder or operator of OML 29 or licensed to hold a mining lease and engage in upstream petroleum operations.

Aiteo secured a favourable ruling on August 19, 2024, when the court granted interim orders of injunction against the defendants.

Justice Nwite restrained the defendants from relating with any person as though they were the operators of OML 29.

• The judge also granted “an order restraining the defendants from acting in any way or taking any steps that would prevent the plaintiff from meeting its statutory obligations arising from OML 29, including payments relating to the CHA, cash calls, royalties, taxes and other statutory obligations under the Petroleum Industry Act (PIA) 2021.”

The banks subsequently filed a motion urging the court to set aside the interim injunction on the grounds of lack of jurisdiction.

However, the parties eventually decided to settle the dispute and compromise the suit.

• They subsequently entered into terms of settlement and forwarded them to the court.
• The terms of settlement stated that the “Parties respectively agreed to settle the dispute in this suit”.

The parties agreed that the terms of settlement would be final and binding and would be adopted by the court as its consent judgment.

Court approves consent judgment

On October 16, 2026, Justice Nwite observed that the parties had signed the terms of settlement.

The judge subsequently adopted the settlement as a consent judgment of the court.

What you should know

Recall that Royal Dutch Shell Plc announced in 2015 that it had completed the sale of its interests in Oil Mining Lease (OML) 29 and the Nembe Creek Trunk Line (NCTL) in the eastern Niger Delta to Aiteo Eastern E&P Company Limited for approximately $1.7 billion.

OML 29 subsequently became the subject of litigation, largely involving disputes over bank loans and related financial obligations.