The Court of Appeal in Abuja has ruled in favor of NorthWest Petroleum & Gas Company Limited, affirming its 69.6% equity stake in the Ede Marginal Field, Oil Mining Lease (OML) 67.
In a judgment delivered on Friday, January 24, 2025, the appellate court upheld NorthWest Petroleum’s appeal against Gab & Nuella Concept Limited and Brinitup Hydrocarbons Limited—the first and second respondents—as well as the Minister of Petroleum Resources.
The ruling overturned a decision by the Federal High Court, Abuja, which had partially dismissed NorthWest Petroleum’s preliminary objection challenging the competence of the case against its equity stake in the Ede Marginal Field.
NorthWest Petroleum Secures 69.6% Stake Amid Equity Dispute
According to bid documents obtained by Nairametrics, on March 1, 2021, the Department of Petroleum Resources (DPR) issued a letter notifying the first and second respondents of their successful bids for various equity stakes in the Ede Marginal Field, OML 67.
However, the notification came with a strict 45-day deadline for full payment of a signature bonus as a condition for final award. The letter made it clear that failure to complete the payment within this timeframe would result in the expiration of their status as awardees.
While Gab & Nuella Concept Limited and Brinitup Hydrocarbons Limited made partial payments, they failed to pay the full amount within the stipulated 45-day period. Both companies requested an extension to complete their payments, but the DPR did not respond to their request.
Following the expiration of the deadline, the Minister of Petroleum Resources withdrew the portion of the Ede Marginal Field that corresponded to the part payments made by the first and second respondents. Subsequently, NorthWest Petroleum was awarded a 69.6% equity stake, which included the equity carved out due to the respondents’ failure to meet their financial obligations.
The DPR also directed all awardees to form an incorporated Special Purpose Vehicle (SPV), proportionate to their equity allocations. However, Gab & Nuella Concept Limited and Brinitup Hydrocarbons Limited rejected the SPV directive, arguing that the government’s decision to reallocate their stake was unlawful and arbitrary.
In response, the Minister of Petroleum Resources issued a 60-day final notice, warning that failure to comply with the SPV formation would result in total withdrawal of their equity stake.
The Legal Battle at the Federal High Court
Unwilling to accept the equity stake reduction, Gab & Nuella Concept Limited and Brinitup Hydrocarbons Limited took legal action at the Federal High Court in Abuja, seeking several reliefs:
•A declaration that the allocation of 69.6% of Ede Marginal Field to NorthWest Petroleum was unlawful, violating the 2020 Marginal Fields Bid Round Guidelines and Sections 73 and 74 of the Petroleum Industry Act.
•An assertion that the allocation process was arbitrary, discriminatory, and lacked transparency.
•A claim that the government did not notify them before reallocating their equity stake to NorthWest Petroleum.
NorthWest Petroleum’s legal team, led by Mark Mordi, SAN, responded by filing a preliminary objection, arguing that:
•The trial court lacked jurisdiction to hear the case.
•The lawsuit was statute-barred, as it was filed beyond the three-month limitation period set by Section 2(a) of the Public Officers Protection Act.
•The court should discharge an ex-parte interim injunction that had earlier restrained the formation of the SPV.
On August 29, 2022, the Federal High Court ruled against NorthWest Petroleum, dismissing its preliminary objection and allowing the case to proceed. However, it did lift the injunction against the SPV, noting that the SPV had already been incorporated before the suit was filed.
Dissatisfied with this decision, NorthWest Petroleum filed an appeal at the Court of Appeal, Abuja, presenting material evidence of its full participation in the bid round and complete payment of the signature bonus for its allocated equity stake.
Court of Appeal’s Final Ruling: Case Declared Statute-Barred
Delivering judgment, Justice Okong Abang ruled that NorthWest Petroleum’s appeal was meritorious, agreeing that the case against it was statute-barred under the Public Officers Protection Act.
The first and second respondents had argued that the statutory time limit should not apply in cases involving allegations of illegality or abuse of power. However, Justice Abang rejected this argument, stating:
“No reason was offered as to why the suit was not filed within the prescribed three-month period.”
He further emphasized that:
“When a suit is filed outside the prescribed statutory period, it remains statute-barred, and the court must decline jurisdiction.”
Abang also criticized the trial court for failing to consider NorthWest Petroleum’s material evidence, noting that:
“The first and second respondents did not dispute that their equity stake in the marginal field was subject to full payment of the signature bonus.”
“They have not disputed the fact that they failed to pay the signature bonus in full.”
The Appeal Court ruled that the Minister of Petroleum Resources acted lawfully in reallocating the respondents’ unpaid stake to NorthWest Petroleum, stating:
“The decision to reduce their potential equity stake due to non-payment and reallocate it to another party that fulfilled all payment obligations and commenced production cannot be considered an act of bad faith or abuse of office.”
As a result, the Court of Appeal struck out the case, declaring it statute-barred and incompetent. It also discharged the interim injunction issued by the Federal High Court, ruling that all orders made in a case lacking jurisdiction were void.
Implications of the Ruling
This judgment cements NorthWest Petroleum’s control over the 69.6% stake in Ede Marginal Field, giving the company unhindered access to its oil and gas assets.
It also serves as a landmark ruling on Nigeria’s oil and gas bid processes, reinforcing the principle that:
•Timely payment of financial obligations is crucial in securing oil and gas licenses.
•Failure to meet bid requirements can result in outright revocation, regardless of a company’s previous status as a preferred bidder.
•Legal challenges to government allocations must be filed within the required statutory period, or they risk being thrown out as statute-barred.
With this legal victory, NorthWest Petroleum is now positioned to fully exploit its controlling interest in Ede Marginal Field, further strengthening its presence in Nigeria’s oil and gas sector.
