The news that the National Union of Petroleum and Natural Gas (NUPENG) and the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) have vowed to cripple oil facilities in Edo and Delta States being operated by Pan Ocean Oil Limited did not come to many as a surprise.
This is because Pan Ocean has been swimming in troubled waters for a while following its assets acquisition by the Asset Management Company of Nigeria (AMCON) following colossal loans totaling about N240 billion which the Fadeyi-led Organization failed to off-set.
However, prior to the crisis, Festus Fadeyi was considered as a multi-billionaire chief of Pan Ocean Corporation, an indigenous oil mogul. Interestingly, at some point, he became frequently mentioned in the Lagos social circles when a Lagos socialite found her way into his life, triggering a clash of domestic interest.
Fadeyi’s children who would not tolerate such an interloper, reportedly fought back with ferocious visibility and dashing alacrity. That war within the domestic front attracted headlines in the digital media.
Worse still, threats from AMCON remained lurking visibly. Consequently, AMCON moved in at a point and took over Fadeyi’s Pan Ocean Corporation’s assets and those of its subsidiaries over the organization’s inability to either service or offset the bank loans purportedly amounting to about N240billion.
In the ensuing corporate melee and acrimonious tussle, Fadeyi’s assets were almost stripped to their bone marrows including his company’s lead office complex and other choice properties which were seized by AMCON.
With those assets gone, the real corporate pandemic hit hard at the intersection between Fadeyi’s led Pan-ocean , which reportedly had about 40% stake in its joint venture arrangement with the NNPC and other oil entities named Interocean Oil Development Co and Interocean Oil Exploration company.
Curiously, it was a partnership structured in a complex tragi-comic fashion. In fact, the narrative seems woven in the pattern of plots and sub-themes in that dramatic construct, Waiting for Godot, written by Irish writer, Samuel Beckett, with all its major dramatis Persona in a massive game of suspense and intrigues.
The compelling story around Pan-Ocean itself is in many ways similar to the two major characters in that tragic-comedy-Vladimi(Didi) and Estragon(Gogo) who engage in a waiting game for the elusive Godot in Waiting for Godot.
Recall that in the JV arrangement with NNPC, Pan ocean was the operator of Oil Mining Lease (OML) 98. But that was where the game of intrigues between Fadeyi and the families of late Fabbri, an Italian Oil magnate reportedly commenced.
According to one account, Interocean Oil Development Co and Interocean Oil Exploration Co. which was owned by the late Fabbri purportedly had a stake in Pan ocean. In fact, according to the deceased’s family, Fabbri who lost his life in 1998 had stakes in Pan-Ocean through Interocean group as legal entities.
Fabbri’s family in their narrative, insist that Interocean entities, given their stakes in Pan-Ocean, are consequently the beneficial owners of Pan Ocean’s 40 per cent stake in OML 98, while the NNPC owns the remaining 60 per cent.
The story did not end there. Fabbri’s family members later accused Fadeyi who was the Nigerian associate of Interocean, through Pan-ocean of purportedly stage-managing a take-over of the company’s investment in the JV using pan-Ocean as vehicle for that purpose, allegedly claiming that the company was indebted to the NNPC.
However, Fadeyi also fought back. Pan Ocean has continued to contest these claims till date including AMCON’s decision to take over Pan Ocean assets in the web of intrigues that have characterized Pan Ocean since 1987.
A furious Fabbri family however headed to court, and therein began a lengthy litigation, negotiations and arbitration. In 2013, they initiated an arbitration proceedings against Pan-Ocean, Fadeyi, the NNPC and the federal government, both jointly and respectively.
After seven tortuous years, the World Bank’s International Centre for Settlement of Investment Disputes (ICSID), which Nigeria is a signatory commenced hearing on the matter. Coincidentally, this was about the same time AMCON moved in to take over Pan-Ocean’s assets.
Reports had been flying around about Pan Ocean’s staggering debt portfolio. One report says an independent auditor accused Fadeyi, through Pan Ocean of cumulatively being indebted to about N240 billion to Skye Bank.
According to the report, Fadeyi, operating via Pan Ocean, purportedly secured the colossal loans to finance the firm’s oil and gas upstream projects operated under a JV Operating Agreements and Production Sharing Contracts with and on behalf of the NNPC.
It was further alleged that the indebtedness was incurred when he (Fadeyi) was represented on the board of the Bank by his son, Dr. Jason Fadeyi, who is said to be based in New York.
Consequently, AMCON moved in speedily on a recovery mission. In the tussle that followed, the oil tycoon reportedly lost his family mansion named “ Grand Villa” in Ikoyi, Lagos, Nigeria.
Other choice properties reportedly seized by AMCON include Fadeyi’s FF Towers and Ark Towers in Victoria Island, Lagos; two other properties on Modupe Alakija Crescent; two properties on Samuel Manuwa Street, Victoria Island; and another property on Adebayo Doherty Street, off Admiralty Way, Lekki Phase 1.
The oil mogul’s troubles were further escalated by the arbitration initiated by the family of the late Fabbri over the battle for the ownership and control of Pan Ocean Corporation.
Recall that the late Vittorio Fabbri, the founder of InterOcean Oil Development Company and Inter Ocean Oil Exploration Company had allegedly gone into partnership with Pan Ocean Corporation.
Consequently, the late Fabbri’s two companies claimed that the 40 percent stakes of Fadeyi’s Pan Ocean Oil Corporation’s Oil Mining License, OML 98, belong to InterOcean — while the NNPC owns the remaining 60 percent.
Since the death of Fabbri, in 1998, his family has been battling Fadeyi over Inter Ocean entities as the beneficial owners of the 40 percent stake in the OML 98.
The Road to ICSID Arbitration and Its Aftermath…
In September 2013, having failed to take control of the Pan Ocean, Fabbri’s companies initiated arbitration against NNPC and the federal government at the World Bank’s International Centre for Settlement of Investment Disputes, ICSID.
In October this year, proceedings at the arbitration came up for adjudication at the ICSID.
Interocean Oil Development and Interocean Oil Exploration, both of which are registered United States entities claimed that they had lost control and ownership of Pan Ocean and blamed the federal government for that loss.
However, the ICSID in its ruling however rejected that position, stressing that the federal government of Nigeria had no liability for the loss of ownership or control over Pan Ocean.
Pan Ocean is the operator of OML 98, and holder of OPL 275, with 40% stakes with the NNPC holding the remaining 60%.
Recall that the two Interocean companies founded by the late Fabbri, had protested that they single-handedly invested in the Asaboro and Ogharefe fields in both Edo and Delta States to enable OML 98 JV take-off in a profitable manner, and should consequently be handed over the 40% stake of Pan Ocean in the JV.
The dispute has a long history dating back to various past administrations in the 1980s. The federal government had accused Pan Ocean of over lifting crude oil far in excess of what was agreed in 1987.
Interestingly, in the intervening years since 1987 when trouble first broke for Pan Ocean, Board room scheming soared with Fadeyi eventually assuming Chairmanship of the company.
To address all this, the Fabbris sought about $1 billion for damages and aggravated damages of $500 million against Nigeria. They also asked the ICSID to direct the FG to hand over an undiluted 40% stake in OML 98 and OPL 275 to Interocean group.
In its ruling, the tribunal accepted that the Interocean companies had lost their investment in both Nigeria and Pan Ocean but insisted that the loss did not “implicate international responsibility” as it was not found to be expropriation against Nigeria.
Meanwhile, as the federal government seems pleased with the judgement, Fadeyi faces grave and intricate mess over Pan Ocean. The implications of AMCON’s take over of the assets of Pan Ocean are beginning to manifest.
Recall that AMCON seized control of OML 147, OML 152 and OML 98 while OPL 275 was converted into OML 147. AMCON decisively handed over OML 98 to NPDC in February.
Reports had indicated that Fadeyi’s son, Dr Jason Fadeyi, allegedly sat on the Board of Skye Bank as a non-executive director at the time most of the loans were purportedly secured, a development that triggered a red flag over possible conflict of interest.
In the meantime, Fadeyi is still contesting AMCON’s actions. But it’s still a tale of Waiting for Godot.