• September 27, 2016
    Last updated 2 minutes ago


Nigeria sues oil companies for $12.7b in ‘illegal’ exports

Government alleges that the companies did not declare more than 57 million barrels of crude oil shipments

19:05 September 20, 2016

LAGOS, Nigeria: Officials say Nigeria is suing several major oil companies for $12.7 billion of oil allegedly exported illegally to the United States between 2011 and 2014.

The Federal High Court in Lagos begins hearings next week in cases filed against Nigerian subsidiaries of US multinational Chevron, British-Dutch Shell, Italian ENI’s Agip, France’s Total and Brasoil of Brazilian Petrobas.

Officials familiar with the cases say the government alleges that the companies did not declare more than 57 million barrels of crude oil shipments. That was deduced from audits of declared exports and what was unloaded in the United States.

The officials spoke on condition of anonymity because the cases still are in court. Oil companies did not immediately respond to requests for comment.

Nigeria, West Africa’s biggest economy, contracted by 2.1 per cent in the second quarter from a year earlier and by 0.4 per cent in the three months through March partly due to falling prices and production of crude oil, the main source of government revenue. The International Monetary Fund forecast the economy will shrink by 1.8 per cent this year, the first full-year contraction since 1991.

S&P Global Ratings downgraded Nigeria further into junk territory just as the country prepares to issue its first Eurobond since 2013.

S&P lowered Nigeria’s rating one level to B, five levels below investment grade and in line with Kyrgyzstan and Angola. The outlook was changed from negative to stable.

“Nigeria’s economy has weakened more than we expected owing to a marked contraction in oil production, a restrictive foreign exchange policy and delayed fiscal stimulus,” S&P said Friday in an emailed statement after markets closed. While government debt remains low, “servicing costs as a percentage of general government revenues are high and rising,” the company said.