Subsidiaries of some of the world’s leading oil companies shipped millions of barrels of Nigerian crude oil to the U.S. but failed to report the shipments, causing a drop in Nigeria’s oil export earnings. Oil companies have now been named in a landmark suit by the Nigerian government, which is seeking billions in reimbursement.
The Federal High Court in Lagos begins hearings next week in the suit against the Italian ENI’s Agip and France’s Total, according to news sources. Oil giants Chevron and ExxonMobil are rumored to be next in line for the Nigerian claims.
According to government officials quoted by The Associated Press, foreign companies declared only 57 million barrels of crude oil between 2011 and 2014 as exports bound for the U.S. when in actuality many more were shipped. The discrepancy was deduced from audits of declared exports and tallies of what was unloaded in the United States.
Ehiozwa Johnson Agbonayinma, a lawmaker, speaking to the House of Representatives in Abuja last week, said, “As of today, the country has to its credit over $17 billion of recoverable shortfalls from undeclared crude-oil exports to global destinations.”
Of an estimated $17 billion in undeclared shipments, more than $12 billion was shipped to the U.S., $3 billion to China and almost $840 million to Norway, while the liquid natural gas, allegedly stolen, was estimated at more than $461 million, the Nigerian government said.
The suit contains a highly detailed list of companies, shipments, bills of lading and revenues lost with each undeclared shipment. In one typical case, a vessel under the name North Star shipped more than 490,000 barrels from Nigeria to the U.S. with a value of $54 million. This oil was sold to BP Products North America in Houston, Texas, but not reported.
The legal action appears to be the latest effort by President Muhammadu Buhari, who pledged to clean up corruption, especially in the oil sector, during his campaign. When he assumed the presidency, he called the “stolen” sums from Nigeria’s oil industry “mind-boggling.”
The U.S. was the biggest importer of Nigerian oil until it began exploiting its own shale oil reserves, though Nigerian exports to the U.S. have increased sixfold this year, according to OPEC.
Speaking at a recent forum between the private sector and the government, Oil Minister Emmanuel Kachikwu, a former executive vice-chair at ExxonMobil Africa, said he was well aware of the Nigerian oil industry’s shortcomings. Since becoming junior oil minister, he has replaced the heads of all eight of the state oil company’s divisions.
A spokesman for Italy’s ENI responded to Nigeria’s suit. “ENI believes the claim has no ground and shall resist in court,” said the spokesman. “Similar requests have been put forward to several other international oil companies operating in Nigeria.”
Chevron said by email, “This matter is the subject of ongoing litigation before the court in Nigeria. We will not comment further on the matter since it is already before the courts.”