Nigeria will not relinquish assets to a firm registered in the British Virgin Islands following a court ruling related to a $9 billion gas project dispute, the West African country’s information minister said on Tuesday. Earlier this month a judge in London granted Process and Industrial Developments Ltd (P&ID) the right to attempt to seize some $9 billion in assets from the Nigerian government over an aborted gas project.
The $9 billion sum would be one of the largest financial penalties imposed on Nigeria, representing 20% of the currency reserves of Africa’s largest economy and top oil producer. Information Minister Lai Mohammed – addressing journalists alongside the finance minister, attorney general and central bank governor in the capital, Abuja – said it would not relinquish any assets.
“The federal government is taking all necessary steps to appeal the decision of the UK Court, to seek a stay of execution of the decision, to defend its rights and to protect the assets of the people of the Federal Republic of Nigeria,” he said. The company was awarded $6.6 billion in an arbitration decision over a failed project to build a gas processing plant in the southern Nigerian city of Calabar. The award was based on what the firm could have earned during the 20-year agreement as part of a deal struck in 2010.
The judge’s decision converted the arbitration award to a legal judgment and the sum rose to around $9 billion with interest accrued since 2013. “This award is unreasonable, an assault on every Nigerian and unfair,” the finance minister, Zainab Ahmed, told journalists. And the attorney general said he believed the contract signed by a previous administration with P&ID, a little-known firm founded by two Irish businessmen specifically for the project, was “designed essentially to fail right from conception”.
“There is need for comprehensive criminal investigations to unravel the undertone of the contract,” he said. He said the agreement with P&ID should have involved international oil companies and Nigerian Petroleum Development Company (NPDC), the country’s main gas producer. Tuesday’s news conference is the latest response from Nigerian authorities following the ruling. Last week Nigeria’s central bank said it would strive to protect the country’s currency reserves following the judgment, though it did not outline measures the bank might take. Reuters