Amid the ongoing legal battle between General Hydrocarbons Limited (GHL) and First Bank of Nigeria (FBN), the oil and gas services company has insisted that the bank reaped benefits from their oil field agreement while failing to uphold its part of the deal.
The deal required First Bank to finance GHL’s development of the Oil Mining Lease (OML) 120.
According to GHL, First Bank approached the company with a financing arrangement to fund the exploration, development, and production of the oil field
Under the terms, both parties agreed to share profits equally. Also, FBN was to receive its financing costs while using its share of the profits to offset a $600m non-performing loan — a liability discounted from $718m under the Asset Management Corporation of Nigeria’s (AMCON) eligible bank asset programme.
GHL, in an explainer made available to THE WHISTLER, insisted that its agreement with First Bank played a huge role in stabilising the bank’s financial health.
As part of a tripartite agreement involving GHL, FBN, and AMCON, GHL provided a guarantee for FBN’s liability to AMCON.
This allegedly helped FBN recover from financial distress, turning its books from a loss of N302bn to a profit of N151bn in its 2021 financial year-end report.
However, despite allegedly benefiting from the deal, GHL noted that First Bank failed to fulfill its obligations under the agreement.
The oil firm further said that the bank was obligated to fully finance the exploration and development of OML 120 but failed to do so.
First Bank’s alleged failure resulted in financial losses, including $47m in lost day rates and operational downtimes.
Furthermore, GHL insisted that FBN’s claim of a $225m debt is premature.
The firm noted that its deal with First Bank is still covered by a moratorium, as commercial production has not yet been achieved.
Due to the impasse, GHL has taken its case to arbitration while First Bank has pursued legal action in court.
THE WHISTLER had reported that Nigerian banks unblocked accounts and assets of General Hydrocarbon Limited and its directors following a ruling by Justice Deinde Dipeolu of the Federal High Court.
This was despite First Bank’s claims of pending orders in connection with the disputed $225.8m financing agreement.
First Bank in a counter press release claimed that the injunctive orders made by Justice Dipeolu on December 30, 2024 were eight in number out of which only two (2) were Mareva Orders.
First Bank’s Board Chairman, Femi Otedola in a post shared on X, claimed that other injunctive orders namely, Orders 6, 7, 8, 9, 10, and 11 were not discharged or set aside, and remain valid and subsisting.
But GHL said that Otedola’s claims were misleading, adding that the banks have complied with the unfreezing of the oil company’s assets and accounts.
First Bank had obtained a series of temporary Mareva injunctions to freeze GHL’s assets, but the first injunction was vacated, with the case now being heard on its merits. Another injunction remains pending at the Federal High Court in Port Harcourt.
GHL had also denied First Bank’s claim of asset dissipation, insisting that all payments in the deal were made directly by First Bank to third parties after due diligence and verification.
The third parties, GHL stressed, are reputable global companies with strict compliance measures.
Meanwhile, GHL said it would file claims exceeding $1bn in various courts against First Bank.
The company also noted that it remains open to mediation and resolution but will continue to fight for justice and damages against the bank.
How First Bank Benefited From OML 120 Deal But Failed On Agreement — GHL is first published on The Whistler Newspaper
Source: The Whistler
