Court Dismisses ExxonMobil’s Suit against NMDPRA

•Affirms Authority’s power to regulate operations of IOCs

Alex Enumah in Abuja

Justice Inyang Ekwo of the Federal High Court, Abuja has dismissed a suit filed by Exxon Mobil Producing Nigeria Unlimited against the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).

The dismissal was sequel to a formal withdrawal by the plaintiff.

.In a rather dramatic twist, Exxon Mobil on the day fixed for judgment, applied to discontinue the proceedings, and moved the court to strike out the suit. In response, Counsel to the Authority moved the court to dismiss the suit, arguing that issues have been joined and there was need for a settled precedent from the court. The court ruled that the proper order to make in the circumstances is one for dismissal of the suit.

Responding to the development, NMDPRA’s counsel, Dr. Emeka Akabogu stated that the win is also a big step in the country’s efforts against oil theft, as it ensures separate monitoring of activities in the different streams of the oil and gas value chain undertaken by related interests.

This ruling holds considerable significance for the petroleum industry in Nigeria as it affirms the regulatory mandate of the NMDPRA as set out in the Petroleum Industry Act 2021 over all midstream and downstream operations including those of international oil companies involved in such activities.

Mobil had in an originating summons dated June 16 but filed June 19, sought the determination of which regulator had the authority to designate and approve its operations as integrated operations under the Petroleum Industry Act, 2021.

The suit was triggered by the NMDPRA’s challenge of the NUPRC’s approval of Mobil’s operations as integrated upstream operations.

However, after lawyers to parties in the suit adopted and argued their brief of arguments on July 27, Justice Ekwo subsequently fixed October 25 for judgment.

But when the matter was called for judgment, counsel to Mobil, Ituah Imhanze, drew the court’s attention to its motion seeking discontinuation of the suit.

Imhanze said the motion was filed on October 23 and served on NMDPRA, the sole defendant in the matter.

“We have an application dated and filed on October 23. It is for my lord to discontinue the suit,” he said.

Responding, the senior lawyer who did not oppose the application for withdrawal, rather urged the court to dismiss it instead of striking it out.

“We urge my lord to dismiss this suit and award very, very high cost,” he added.

But Imhanze disagreed with Etuwewe, arguing that he would not concede to any cost because as a minister in the temple of justice, he had the duty to bring whatever happens in the course of a case to the notice of the court.

The lawyer hinged his argument on the recently released presidential policy directives which touched on the substance of the suit.

Justice Ekwo, consequently, dismissed the suit but declined to award cost against Mobil.

“Rather than award any cost, I will ask parties to go and remain in peace,” he said.

Mobil had approached the court to challenge the competence of NMDPRA to regulate certain aspects of its operations like butane lifting which it maintained were integrated to its Oil Mining Leases (OMLs) and thus within the exclusive regulatory purview of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).

By its originating summons filed on 19 June 2023 in suit No. FHC/ABJ/CS/844/2023, the plaintiff argued that the implicated operations were designated as ‘integrated petroleum operations’ in accordance with the Petroleum Industry Act 2021 (PIA) and consequently prayed the court to restrain NMDPRA from all attempts towards licencing or any other form of regulation of those operations.

In response, NMDPRA through its lawyers Ama Atuwewe (SAN) and Dr. Emeka Akabogu argued that NMDPRA was empowered under the PIA to regulate all midstream and downstream petroleum operations in Nigeria and that the particular operations in question were outside of what the law envisaged as ‘integrated petroleum operations’.

 After the hearing of the case, the court reserved its judgment for October 25, 2023.

The ruling is believed to hold considerable significance for the petroleum industry in Nigeria as it affirms the regulatory mandate of the NMDPRA as set out in the Petroleum Industry Act 2021 over all midstream and downstream operations including those of international oil companies involved in such activities.

According to NMDPRA’s counsel, Dr. Emeka Akabogu, the win is also a big step in the country’s efforts against oil theft, as it ensures separate monitoring of activities in the different streams of the oil and gas value chain undertaken by related interests.