The oil and gas industry is about scaling one of its hurdles – evacuation of crude oil, as the Green Energy International Limited (GEIL) Otakikpo Crude Oil Export Onshore Terminal is set for operation.
Lack of infrastructure for crude oil evacuation usually results in the output losses, which has compelled some International Oil Companies (IOCs) to divest from their onshore assets.
But after the facility tour of the GEIL onshore terminal in Otakikpo, Andoni Local Government of Rivers State by members of Independent Petroleum Producers Group (IPPG), it was evident that with the facility, the cost of crude oil evacuation will reduce.
Speaking with reporters after the tour, IPPG Secretariat Coordinator, Mr. Oyeleke Banmeke was impressed that the infrastructure deficit will soon become history.
He said the industry usually forgets the role of infrastructure while discussing crude oil production.
According to him, the 250,000barrels per day export terminal will ensure reliability and availability of the crude oil.
The stakeholders present in the facility tour included representatives of Fidelity Bank PLC, Marine industry, IPPG and others.
His words: “They (investors that assessed the terminal) have been very impressed with what they have seen. It is shocking that we have a terminal, an onshore terminal, that can take 250,000 barrels of oil a day. And, you know, we talk about energy security every time.
We talk about a production of crude. But we have never talked about the infrastructure to manage it. And if you look at it, we have an infrastructure deficit across the entire value chain for the oil and gas industry.
“So now you put this kind of thing (terminal) in place. What it has done for us is to ensure reliability. It has helped us to ensure availability.
“And finally, resilience of the infrastructure. So when I talk about availability, I am talking about having enough evacuation, you know, is to move your products out of the country to the export market. When I talk about reliability, we are talking about security issues.”
He said with the terminal in place, there will be restoration of stranded production, access to market and finance.
According to the Terminal Managing Director, Engr. Kayode Adegbulugbe, the facility should be ready to export the first crude oil on June 2, 2025.
He said although the terminal has the capacity to export 250,000 barrels per day, the GEIL crude oil production is currently producing 10,000bopd, about 1.6% only 4 per cent of the terminal’s export capacity.
He said the excess capacity will be set aside for third party crude oil export.
The Managing Director said: “So this facility is used to hang 250,000 barrels per day. That would be 1,6% of the current production that is ready to go.
“Our field, Otakipo, can deliver only 10,000 barrels per day. So we can only use 4%, 4% of this capacity. So we have 96% or 240,000 barrels per day ready to be used.
Explaining the third party target, he said, the terminal is locally where there are no other ones.
“The advantage we have is we are local and we are flexible. There is no other terminal in Nigeria that would allow you to bring crude in by truck, by barge, via delivery, from the aquatic ocean, and then by pipeline. We are set up today to accept crude by all four crews.”
He revealed that one of its companies has started transporting crude into the infrastructure.
GEIL Chief Executive Officer (CEO), Prof. Anthony Adegbulugbe disclosed that the Otakikpo onshore terminal is the first of such to be conceptualized by an African indigenous operator and the first of such to be constructed in more than decades in the country.
He noted that in the last 60 years a critical infrastructure as the terminal has not been constructed even by the IOCs.
The CEO said more than 90 per cent of the terminal’s construction was handed by a local contractor.
Experts say the case underscores the fundamental principles of law and governance obligations that corporate organisations must comply with to avoid such exposures.
How the case unfolded
The case at the trial court centred on the property located at No. 25, Probyn Road, Ikoyi, Lagos.
The second respondent, G. Cappa, took over the property, comprising 10 flats and two penthouses.
It was by a lease agreement between it and the defunct National Electric Power Authority (NEPA) for a 25-year lease commencing from January 1, 2001.
G. Cappa mortgaged the property to Fidelity Bank as security for a loan of $3 million.
The company also took another loan of N100 million and securitised it with some of its properties in Ibadan, the Oyo State capital.
When the facilities reached their due date of repayment, G. Cappa failed to pay.
As a result, Fidelity Bank sold one of the properties in Ibadan.
Angered by the sale, G. Cappa filed suit FHC/L/CS/957/2005 before the Federal High Court in Lagos against Fidelity Bank.
The court granted an order of interim injunction on September 9, 2005, restraining Fidelity Bank from further interfering with, disposing of or taking over the property in dispute.
In spite of the subsisting order, Fidelity Bank appointed Hemaco Commercial Enterprises to dispose of the property on its behalf.
Hemaco marketed the property to Sagecom Concepts, which was unaware of the order of the interim injunction.
Sagecom showed interest in purchasing the property, and a purchase price of N350 million was agreed for the unexpired residue of the 25-year lease taken by G. Cappa from NEPA.
The sale was consummated in November 2005.
Sagecom made payment through its financiers, First City Monument Bank (FCMB).
To the knowledge of Fidelity Bank, Sagecom financed part of the purchase price amounting to N300 million with a loan from FCMB at an interest rate of 19.5 per cent per annum.
Upon the receipt of a bank draft for the purchase price, Fidelity Bank handed over the title documents of the property to FCMB as agreed.
It also gave Sagecom a list detailing the annual rental value of each of the flats and penthouses.
Sagecom remained unaware of the subsisting interim injunction granted by the Federal High Court.
The company only found out through an advertisement of the order in a newspaper on January 3, 2006, after the payment of the purchase price had been made.
Upon becoming aware, Sagecom wrote to Fidelity Bank through its solicitors seeking a refund of the purchase price, but the bank was not forthcoming.
Meanwhile, Sagecom was joined as a defendant in suit FHC/L/CS/957/2005 before the Federal High Court.
It counterclaimed against both Fidelity Bank and G. Cappa for possession and special damages.
The Federal High Court delivered judgment on June 20, 2011, declining jurisdiction on Sagecom’s counterclaim and transferring the case to the High Court of Lagos State.
To prosecute the counterclaim, Sagecom took out a Writ of Summons and Statement of Claim before the Lagos High Court.
The company prayed for $60,000.00 or its naira equivalent (at the Central Bank money market official exchange rate prevailing on the date of actual payment) per annum being the disclosed annual rental value of Flat 1 of the property with effect from November 25, 2005, up till June 20, 2011, against the bank only; and, jointly and severally against both defendants with effect from June 21, 2011 either until possession thereof is yielded to the claimant, or until the expiration of the remainder of the 25 years lease period commenced on January 1, 2001, conveyed to the claimant by the bank (whichever is earlier).
The claimant claimed other sums, including $33,750.00 or its naira equivalent for Flat 2.
Lower court judgment
After the trial, the High Court indicted Fidelity Bank for not disclosing the existence of the suit before the Federal High Court or the subsisting interim order.
The court found that Sagecom Concepts had lost valuable time, during which it could not economically exploit the property due to its inability to take possession.
The court, therefore, granted all the reliefs sought by Sagecom.
Fidelity Bank appeals
Dissatisfied, Fidelity Bank appealed to the Court of Appeal. It contended that since the trial court found that G.Cappa was the one that had been collecting all the rents since November 25, 2005 when Sagecom bought the property, it was wrong for the court to have held that the company proved its entitlement to special damages.
The bank faulted the order that it must pay the damages alone or jointly and severally with G.Cappa.
Court of Appeal judgment
The Court of Appeal again faulted Fidelity Bank for not informing Sagecom Concepts of the pendency of the suit before the Federal High Court and the subsistence of the interim order against it.
It held that G.Cappa could not be made to answer for the bank’s lapses.
In all, the Appeal Court affirmed the judgment of the trial court in toto (in its entirety) against Fidelity Bank.
Bank heads for Supreme Court
Still dissatisfied, the bank filed an appeal numbered SC/CV/602/2021 at the Supreme Court.
The apex court delivered its judgment on April 11, 2025.
Justice Adamu Jauro read the lead judgment.
Members of the panel included Justices Lawal Garba, Jummai Sankey, Moore Ademein and Abubakar Umar.
The Supreme Court knocked Fidelity Bank for spurning the fundamental principle of law that all orders must be obeyed, and that he who goes to equity must do so with clean hands.
Justice Jauro held: “The actions of the appellant made it impossible for the first respondent (Sagecom Concepts) to take possession of the property and enjoy the economic benefits thereof.
“I am in full agreement with the judgment of the trial court as affirmed by the lower court that the appellant was liable to the first respondent in damages…
“Apart from the mountain of evidence against it, allowing the appellant (Fidelity Bank) to escape liability as it so desperately seeks to do here would be tantamount to allowing it to benefit from its own wrong.
“The notorious principle of equity that a court ought not to allow a person to take advantage of his own wrong still remains part of our jurisprudence…
“I, therefore, resolve the sole issue for determination against the appellant and in favour of the first respondent.
“Consequently, I find that the appeal is lacking in merit and same is hereby dismissed.
“The judgment of the Court of Appeal, Lagos Division, which upheld the judgment of the High Court of Lagos State, is hereby affirmed.”
Other members of the panel concurred.
Excoriating Fidelity Bank, Justice Sankey held: “At the heart of the matter lies the appellant’s somewhat egregious conduct in selling a property it knew was subject to a restraining court order, thereby depriving the first respondent of possession and the economic benefits of its purchase for many years.
“The letters exchanged between the parties, particularly the appellant’s own correspondence, established beyond doubt that it was fully aware of the injunction granted by the Federal High Court prior to the sale transaction, and yet proceeded with the sale regardless.
“This was not mere negligence but a deliberate disregard for both the court’s authority (with the intention to undermine it) and the first respondent’s rights as an innocent purchaser.
“The law remains that parties to a suit must obey court orders, whether or not they are correct.
“So long as there is an order issued by a competent court of record in existence, it must be obeyed unless and until it is set aside.
“This has consistently been the position of this court in numerous decisions.”
