By Abiola Olawale
The legal disputes between Nigeria’s oldest financial institution, the First Bank and General Hydrocarbons Limited (GHL), an oil company, have continued to generate different twists and turns.
This is as a crude oil cargo owned by General Hydrocarbons Limited (GHL) was arrested yesterday.
The situation comes following a legal battle with First Bank of Nigeria over an alleged $225.8 million debt.
The arrest of the crude oil cargo was reportedly executed following an order from the Federal High Court in Port Harcourt, Rivers State.
The court, in a ruling, had reportedly allowed the arrest and detention of the cargo on board the Floating Production Storage and Offloading (FPSO) Vessel Tamara Tokoni.
The presiding judge, Justice E.A. Obile, had on January 9, 2025, ordered the detention of the crude oil cargo on board FPSO Tamara Tokoni. The New Diplomat reports that the court’s order was part of a broader legal dispute, where First Bank claimed that GHL had missed several repayment deadlines for credit facilities extended to them.
However, GHL’s Director of Strategy and Operations, Abdelmuizz Bello, denied First Bank’s claims, emphasizing that it was not indebted to the financial institution and had acted within the confines of legally binding agreements.
According to Bello, GHL entered into a Subrogation or substitution Agreement with FBN on May 29, 2021. Under this subsisting agreement terms, GHL maintains that FBN Holdings was to fund GHL’s exploration and development of OML 120 in exchange for a 50% share of profits from oil proceeds over the years.
This subsisting profit-sharing arrangement, GHL maintains, was appropriately designed to help FBN settle its non-performing loans (NPLs) and stabilize the bank’s financial standing in keeping the premier financial organization well afloat. The Oil company also clarified that FBN’s claims of indebtedness stemmed from unrelated NPLs extended to Atlantic Energy, a company operating separate oil fields under Strategic Alliance Agreements.
It was gathered that this deal pertained to the funding necessary for the exploration and development of Oil Mining Lease (OML) 120. The GHL contended that First Bank had not honoured the commitments outlined in their original binding contract, leading to significant concerns regarding the future of the oil project.
As a result, GHL initiated contempt proceedings against FBN and its directors, including Femi Otedola, the Chairman of FBN Holdings.
