OML 130: Total Energies Seeks Protection as Palmeron Threatens Contempt of Court

Emmanuel Addeh in Abuja

Total Energies Upstream Nigeria Limited has approached the Appeal Court in Lagos, seeking to stop Palmeron Nigeria Limited, an indigenous oil servicing firm, from committing it to prison for contempt of court.

In court papers obtained by THISDAY yesterday, Total Energies was asking the court to restrain the indigenous oil firm commencing committal proceedings against it for proceeding with a project while the case is still pending in court.

Justice Rasul Olukolu of the Lagos High Court, had declined to halt a suit instituted by Palmeron Nigeria Limited, against a Nigerian National Petroleum Company Limited subsidiary, the NNPC Upstream Investment Management Services (NUIMS) and Total Energies.

The ongoing dispute on Oil Mining Lease (OML) 130 was over a rig contract for which the Nigerian company, Palmeron, complained that it offered the Deep Value Driller at a lower price during a tender, but was rigged out of the process without explanation.

Total operates the block, which holds the Akpo and Egina fields. The energy company intended to carry out infill drilling on Egina this year, possibly anytime from the second quarter.

Palmeron had told the High Court  that it expressed interest after Total Energies published the first tender. But to its chagrin, Palmeron had said the French oil company then called off the tender process after much progress had been made and a lot of expenditure had been made without the company giving it any explanation.

The “tender process was called off without giving any reasons,” the firm told the court, with the contract later awarded to a consortium of Tirex Petroleum, Pidwal and Noble.

Palmeron had thereafter threatened to commit Total Energies to prison for going forward with the award to another firm and continuing work on the project even though there was a pending substantive case in court.

The local firm had won round one of the suit in which it prayed the court to continue hearing the case, although Total Energies told the court that the contract agreement stipulated that any breach would go to arbitration rather than the regular courts. But Olukolu had dismissed Total Energies’ prayer, noting that there was no contract yet per say and that it couldn’t go to arbitration.

Palmeron’s lawyers had faulted the insistence of the defendants on proceeding with the provision of the drillship rig for OML 130 despite the fact that their application for interlocutory injunction had been adjourned for arguments.

“Our client’s representatives informed us that despite the fact that the court assumed jurisdiction in the matter and refused to refer the matter to arbitration, you directed that the drillship rig be moved to OML 130 and commence operations on the 28th January, 2023.  Your conduct is contemptuous and you will be solely responsible for your action,” Palmeron had noted in a letter to Total Energies.

But in new court papers seen by THISDAY, the French major is asking for, “an order restraining the 1st Respondent (Palmeron), whether by itself, or through any servants, agents, privies or any other persons acting on its behalf or at its behest from commencing, initiating or taking any steps whatsoever (including threatening or commencing committal proceedings against the applicant), that would disrupt or interfere with the conduct of the project pending the hearing and determination of the appeal filed by the applicant vide a Notice of Appeal dated 27 January 2023.”

Furthermore, it is asking the court to restrain Palmeron from “acting or taking any steps to delay, interfere with or howsoever otherwise disturb the orderly and expeditious conduct and progress of the arbitration commenced by the appellant/applicant for the purpose of obtaining a resolution of the dispute between the parties in relation to the Call for Tender for the Project, pending the hearing and determination of the Appeal filed by the Applicant vide a Notice of Appeal dated 27 January 2023”

It is also asking for an order staying further proceedings before the High Court of Lagos State in the proceedings numbered and titled Suit No LD/4618CMW/2022: Palmeron Nigeria Limited v TotalEnergies Upstream Nigeria Ltd and Anor, pending the determination of the appeal filed by the applicant.

However, a source told THISDAY that it was strange that the International Oil Company (IOC) rushed to the appeal court to stop its suit  when the case will come up on March 1 this year, just a few days away.