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Nigeria Sues Kase Lawal over Unpaid $35m Royalties

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Nigeria has sued Allied Energy Plc, the oil prospecting company owned by the Texas-based Nigerian-American billionaire Kase Luqmon Lawal over the firm’s failure to remit royalties to its treasury. The suit was filed at a Federal high Court in Lagos by Adebayo Ologe, a lawyer acting on the authority of President Muhammadu Buhari who doubles as the Minister of Petroleum Resources.

Nigeria is demanding $35,748,264.82 being outstanding oil royalties and accrued interest. The country is also seeking a perpetual injunction restraining the company either by itself or through its agents, receiver of its assets and creditors from having access to or dealing with its assets or residual thereof, until the aforesaid sum of $35,748,264.82 and accumulated interest thereon has been fully discharged.

In a statement of claim, assistant director, planning Division of the Department of petroleum resources Efe Bassey, alleged that Allied Energy PLC in receivership, in the course of its mainstream business, applied for and was granted an oil mining lease number 120 (OML120) and oil mining lease number 121 (OML121) for the exploration and production of petroleum oil and gas assets.

After the OMLs were ceded to the company by the Minister of Petroleum Resources, Allied Energy PLC operated the leases and took full benefits of the exclusive right to prospect, explore, produce and undertake marketing of crude assets in commercial quantities in the leased areas.

The suit claimed that the company failed to fulfill its obligations to the Nigerian government by way of remittances and fees after exploiting the oilfields without hindrance.

The government claims that Allied Energy PLC was bound to fulfill its counterpart obligations of ensuring prompt remittance of a statutorily fixed sum of money representing the royalty on oil and gas production, concession rental and gas flaring penalty due to the Federal Government through the office of the minister of petroleum resources.

These include, but not limited to the royalties for oil production from the relevant oil blocks in the sum of $34,662,933.32 and gas flared penalty in the sum of $1,085,331.50 for various years dating back to 2009. The minister through the Department of petroleum resources for which he has oversight functions at different times, has written to Allied Energy PLC making repeated demands for all the outstanding payments royalty for oil produced from the relevant oil blocks and gas flared penalty for various years dating back to 2009, but the defendant has failed and refused to make any remittance.

An investigation by the Lagos Times revealed that Allied Energy PLC is controlled by several entities and individuals, most of whom have direct ties to Mr Kase Lawal. They include: Rasheed Olanrewaju Lawal, Sifawu Abegbe Lawal, Bolatito Ibrahim Lawal, Camac Energy Holding Limited, Marty Mortensen, Bestman Clement Kio, Limota Asande Lawal, Kamoru Lawal, Mickey Lawal, Iyabo Adegbemile, Adekunle Alli and Olayide Olufemi.

The lawsuit is the latest setback to hit Mr Kase Lawal, whose Erin Energy PLC applied for voluntarily bankruptcy in 2018 and is currently fending off creditors in the United States. Allied Energy Plc did not respond to repeated requests for comment.

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