General Hydrocarbons Limited (GHL), a Nigerian oil company, has accused First Bank of Nigeria (FBN) of failing to honour contractual payment agreements, leading to a critical offshore situation in 2023. The incident reportedly put the lives of 93 people at risk on the oil rig Blackford Dolphin.
What Happened?
On October 7, 2023, the rig ran out of essential supplies like fuel and food while stationed 75 kilometres offshore Nigeria. The situation was dire, with foreign nationals on board contacting their embassies, fearing for their safety. GHL stated it was forced to step in after FBN delayed payments to suppliers for over 70 days far beyond the agreed five-day payment window.
The company said it made emergency arrangements to ensure the safety of the crew and avoid an international diplomatic incident. GHL issued an irrevocable third-party payment order, allowing one of its clients to directly pay the suppliers. This move stabilised operations and provided the rig with much-needed supplies.
FBN’s Response and Allegations
FBN, however, has accused GHL of diverting funds meant for the development of oil mining lease (OML) 120. GHL denies these claims, insisting that all payments were made within the terms of their agreement. The company also said it has provided proof of these payments, but FBN continues to misrepresent the situation.
What the Contract Says
According to GHL, the loan agreement between the two companies, signed on May 29, 2021, required FBN to release funds within five business days of a request. However, GHL claims payments often took 70 days or were not made at all.
Why This Matters
This dispute sheds light on the financial challenges within Nigeria’s oil industry and the consequences of delayed payments on operations. It also highlights the risks posed to offshore workers and the reputational damage such incidents can cause for the country.
GHL has stated its intention to take FBN to court, armed with logs and daily reports to refute allegations of fund diversion.
As the legal battle unfolds, this case could set a precedent for how financial agreements are enforced in the Nigerian oil sector.