Emmanuel Addeh in Abuja with agency report
The owners of an oil production and storage vessel, Trinity Spirit, had a history of financial trouble, amounting to more than $200million, before the ship exploded in Nigerian waters two years ago months, revealed a Bloomberg report.
Although the management of the company, Shebah Exploration and Production Company, admitted that the company was “in receivership”, the new investigation has now revealed how the company accumulated the colossal debts which led to its eventual collapse.
In its latest update, the company said three out of a possible 10 people on board survived the fire, noting that a total of five bodies were found on or around the ship.
The ship caught fire on February 2, burned for more than 24 hours and left a stain of crude stretching for miles across the Atlantic Ocean.
Although the cause of the accident has not yet been determined, the Ministry of the Environment estimated that up to 60,000 barrels of oil were on board the ship at the time of the fire.
According to the report, which documented a trail of the vessel, creditors have filed lawsuits against the company operating the vessel, in at least three countries, accusing the company of defaulting on several financial agreements.
These include two bank loans totaling $220 million and a contract for the management of the ship itself, according to court documents and company filings.
It all started when a prominent businessman and chairman of Shebah, Dr. Ambrosie Bryant Orjiako, acted as a personal guarantor for a $150 million loan taken out by the company in mid-2012 from the African Export-Import Bank (Afrexim) and two Nigerian lenders to finance a drilling program on the company’s oil permit.
Shebah leased the vessel from one of its shareholders named Allenne Ltd., a company registered in the British Virgin Islands of which Orjiako was a director, according to court documents.
Orjiako is best known as the founder of Seplat Energy Plc, which since 2009 has become Nigeria’s largest independent oil producer and agreed in February to pay $1.3 billion for Exxon’s shallow water assets. Mobil Corp. in the country.
According to Bloomberg, Seplat has no involvement with the Spirit of the Trinity or any of Shebah’s legal disputes, Orjiako said by email, declining to comment on the issues that are still before the courts.
He referred questions about the vessel to Shebah’s managing director, Mr. Ikemefuna Okafor, who did not respond to emails or calls. Orjiako announced in November that he would step down as chairman of Seplat in May.
Shebah stopped repaying the Afreximbank loan after meeting a single installment of $6.1 million, according to a lawsuit filed by the UK lenders against the company, Allenne and Orjiako.
In February 2016, a judge ruled the banks were entitled to $143.9 million, which remains unpaid and doubled with interest, Afreximbank said in a statement. Banks “continue to review their options for recovery,” Afreximbank said through its law firm, Baker McKenzie.
Orjiako, 61, had argued that Afreximbank’s delays in releasing funding had led drilling contractors to withdraw or suspend their services, according to a defense he submitted to the London court in September 2015. British judge rejected an appeal by Shebah and Orjiako against the ruling in mid-2017.
In 2004, Shebah acquired a 40% stake in a license known as Oil Mining Lease (OML) 108 from ConocoPhillips while Allenne purchased the Trinity Spirit from the Houston-based producer. Shebah agreed to bear all costs in exchange for 80% of the block’s revenue.
Production levels would not return to Conoco’s 20,000 barrels per day from the license, with no recorded production since 2017, according to data released by the Nigerian state-owned energy company.
The government announced in 2019 that it was revoking the permit, without giving reasons. A spokesman for the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), the outlet said, did not respond to questions about the license withdrawal.
Shebah is also under pressure from other creditors. Last year, a Federal High Court in Lagos granted Zenith Bank Plc, one of Nigeria’s biggest lenders, an injunction preventing certain companies from dealing with Shebah’s assets in a dispute over a $70 million loan. dollars granted in 2014 to the Orjiako company. Zenith said it does not comment on cases that are before the courts.
A Houston-based oil services company, Alliance Marine Services, claimed it terminated a management contract for the Trinity Spirit after Shebah ran up $5 million in arrears, according to a case filed in US federal court in 2009.
The claimant said he had also initiated arbitration proceedings in the UK to try to recover the money. AMS voluntarily dismissed the lawsuit several months after it was filed and it is unclear whether the dispute has been resolved. Bloomberg could not reach AMS.
Shebah and two other companies linked to Orjiako were ordered by a British court in 2020 to pay $4.3 million to a Greek shipping company after the trio defaulted on a 2017 deal to charter a tanker.
In 2019, a federal high court approved the appointment of a receiver by the state debt collection agency, the Asset Management Corporation of Nigeria (AMCON), to manage Shebah.
Before the fire, the oil company, still in receivership, had offered the Trinity Spirit to AMCON to reduce part of its debt and recover part of the loans made by local lenders in 2012.