*The international oil majors plan to withdraw multibillion-Dollar lawsuits against the Nigerian National Petroleum Company Limited, following their recent renewed leases with the Federal Government, and production-sharing contracts with the Company

Isola Moses | ConsumerConnect

Shell Plc, ExxonMobil Corporation, Chevron Corporation and Equinor ASA plan to withdraw multibillion-dollar lawsuits against the Nigerian National Petroleum Company (NNPC) Limited, the country’s commercial energy company, after finalising new terms for deepwater oil production in Africa’s largest crude producer.

ConsumerConnect learnt that in letters to two New York Federal judges August 22, 2022, in the United States (US) the international oil majors said they had agreed to settle with the Nigerian National Petroleum Company, and will terminate ongoing litigation once the new arrangements take effect.

Malam Mele Kyari, Chief Executive Officer of NNPC Limited (l), and President Muhammadu Buhari, During the Recent Unveiling of the Company, in Abuja, FCT

The move reportedly came 10 days after the firms renewed leases with the Federal Government, and production-sharing contracts with the NNPC for the permits at the heart of long-running disputes over the allocation of crude.

Equinor and Chevron filed a suit in the US four years ago, asking a court to enforce a $1.1billion award issued by an arbitration tribunal against the NNPC as a Corporation 2015, Bloomberg report said.

Shell and Exxon also initiated similar proceedings in New York in 2014 over a $1.8 billion arbitration award.

Both penalties followed allegations by the oil majors that the NNPC took crude beyond its entitlement under contracts signed in 1993 that were designed to incentivise the companies to develop deep offshore blocks.

Lawyers for Equinor and Chevron asked the Judge to suspend the case until the end of October “to allow sufficient time for the conditions to be satisfied and for the settlement agreement to become effective.”

Once that happens, the companies “expect to withdraw this action,” the letter said.

Meanwhile, Exxon and Shell anticipate being able to do the same after 60 days, they stated in a separate letter.

The extension of Equinor’s licence August 12 this year “was an important milestone” that “secures continued production and cash flow,” a Spokesman said by e-mail.

He said: “All outstanding disputes in Nigeria have also been resolved” as part of the renewal agreement.

However, Shell and Chevron declined to comment on the development, while Exxon and NNPC Limited also did not immediately respond to requests for comment, according to report.