Trade minister’s firm, others sued for $249m over alleged breach of contract

For alleged breach of confidentiality obligations, Petroleum Zion Exploration and Production Ltd has instituted a $249million suit against a company co-founded by Nigeria’s Minister of Trade, Industry and Investment, Okechukwu Enelamah, African Capital Alliance Ltd (“ACA”).

The claimant in the suit filed at the Federal High Court, Lagos, contend that the company unlawfully interfered with its transaction to purchase Afren’s stake in Oil Mining Lease (“OML”) 26, with a production potential over 10,000 barrels of oil per day

Enelamah, who was the CEO of ACA before his appointment as minister was sued alongside PJT Partners UK Ltd, FHN 26 Ltd, Wilmington Trust (London) Ltd, Vertex Energy Ltd, Department of Petroleum Resources, and Ministry of Petroleum Resources.

Other defendants are Simon Jonathan Appell, Daniel Imison and Ms. Catherine Williamson (who are being sued in their capacity as UK administrators of Afren UK Plc and Afren Nigeria Holdings Ltd).

The claimant averred that, sometime in 2015, Afren Plc (a UK listed Pan- African Oil and Gas Company currently under insolvency) mandated PJT Partners (a subsidiary of Blackstone Group UK) to liquidate all its assets in Nigeria, including its 100% stake in FHN26 (a special purpose vehicle of that owns a 45% interest in OML 26).

The claimant expressed interest in acquiring the said stake in OML 26 (the “Sale Asset”) and was eventually declared preferred bidder, whereupon it commenced negotiations, in good faith, and reach agreement to execute a Sale Purchase Agreement in respect of the Sale Assets (“SPA”).

The claimant stated that due to the global fall in oil prices, which impacted the value of the Sales Asset, the deal was later renegotiated during which price sensitive and propriety information’s was divulged on confidential basis for 10 months between August 2015 and May 2016.

According to claimant, the PJT Partners in handling the transaction on behalf of Afren’s administrators breached confidentiality obligations owed to the plaintiff, unlawfully disclosing the plaintiff’s bid price and other sensitive information to ACA (who secretly joined the bid process later) and now on the verge of concluding the transaction leveraging the sensitive information unlawfully obtained from PJT Partners to its advantage.

The plaintiff contends that PJT Partners disclosed the sensitive information it gathered from it (Petroleum Zion) including renegotiated terms to ACA, which made it easy for ACA to want to close the transaction.

Petroleum Zion is therefore, seeking for an order mandating First Hydrocarbon Nigeria Company Ltd and or Wilmington Trust (as Security Trustees of the Sale Asset) to execute the draft SPA in the form agreed with Petroleum Zion as at May 24, 2016.