Nigeria orders seizure of crude oil onboard FPSO amid $225mn loan dispute

Nigeria’s Federal High Court in Port Harcourt has ordered the arrest of crude oil aboard the FPSO Tamara Tokoni, owned by General Hydrocarbons Limited (GHL), in response to financial claims from First Bank of Nigeria (FBN). 

The ruling was issued by Justice E.A. Obile on January 9, 2025, following an ex parte motion filed by FBN. The ruling was published by Nairametrics on January 15.

FBN alleges that GHL, a Lagos-based oil and gas company, owes $225mn related to the financing and development of Oil Mining Lease (OML) 120. The bank is demanding a $19.8mn guarantee alongside additional costs. As per the court’s decision, GHL is prohibited from tampering with the cargo until the dispute is resolved. The vessel, operated by Century Group Nigeria, remains under surveillance, with enforcement by the Nigerian Navy and other regulatory agencies.

The case, scheduled for further proceedings on February 10, 2025, is the latest development in escalating tensions between the two entities. Previous court orders have included asset freezes targeting GHL and its affiliates.

GHL disputes FBN’s allegations, insisting it has adhered to contractual obligations. In a statement, the company claimed it had entered into a 2021 subrogation agreement with FBN to finance OML 120’s development. Profits from oil production under the agreement were to be split equally over an eight-year period, aimed at reducing FBN’s non-performing loans (NPLs), particularly those associated with Atlantic Energy.

GHL asserts it has no ties to these NPLs and accuses FBN of failing to fulfil funding commitments under the agreement, leading to delays and estimated losses exceeding $147mn. Despite an initial $185mn disbursement by FBN, GHL contends that irregular payments disrupted operations at OML 120.

The company also claims that during the project’s execution, FBN managed payments directly to contractors, bypassing GHL. It maintains that its support during FBN’s financial struggles demonstrates its commitment to the partnership and denies any indebtedness.