AELEX represented the Shell Petroleum Development Company (SPDC) in a landmark decision involving the renewal of the Oil Mining Licence 11 (OML 11).
At the Federal High Court, SPDC was successful as the Court entered judgment in its favour and ordered the Federal Government of Nigeria (FGN) to renew the licence for a further term of 20 years.
However, the FGN appealed against the Judgment at the Court of Appeal. In its Judgment, the Court of Appeal determined that the appeal dealt with the issue of the right of Nigeria, as a sovereign nation, to control its resources. Thus, the Court reversed the Federal High Court’s decision and held that notwithstanding the use of mandatory words in the relevant provisions of the Petroleum Act, the said Act cannot be interpreted to compel the FGN to renew an OML. The Court stated that the FGN should always have the discretion to deal with the natural resources of Nigeria in the best interests of the country.
An appeal has now being filed against the Judgment of the Court of Appeal, at the Supreme Court (the “Appeal”).
This matter is of huge significance to other companies operating in the oil and gas sector who have made similar capital investments and are likely to approach the FGN for a renewal of their licences.