Nembe E&P: Clarifies EFCC Pipeline Fees Recovery for JV

• Nembe Exploration and Production Company clarified that the EFCC recovered pipeline fees owed to its joint venture, not from the company itself.
• Nembe operates the Nembe Creek Trunkline for its JV with NNPCL, providing services to third-party operators like Newcross.
• Outstanding transportation fees accumulated due to operational challenges including crude oil theft, vandalism, insecurity, and COVID-19 disruptions.
• Nembe had made multiple unsuccessful attempts to recover the debts before the EFCC utilized its statutory powers.
• The EFCC's intervention facilitated the recovery of funds for services rendered, clarifying Nembe's role as the party pursuing the debt.

The Economic and Financial Crimes Commission's subsequent intervention leveraged its statutory investigative and recovery powers to address these outstanding obligations.

Nembe Exploration and Production Company Limited, formerly known as Aiteo Eastern Exploration and Production Company Limited, recently issued a statement to clarify its involvement in the Economic and Financial Crimes Commission's (EFCC) recovery of outstanding pipeline transportation fees. The company emphasized that the funds secured by the EFCC were due to its joint venture (JV) and not collected from Nembe itself, addressing what it described as misleading media reports. This clarification aims to set the record straight regarding the nature of the EFCC's intervention.

The company further detailed its operational responsibilities, explaining that it manages the Nembe Creek Trunkline (NCTL) on behalf of its joint venture with the Nigerian National Petroleum Company Limited (NNPCL). In this capacity, Nembe provided essential crude oil transportation services to various third-party operators, including Newcross Exploration and Production Limited. It was through these services that significant outstanding transportation fees accumulated over time, which Nembe, as the operator, was tasked with pursuing for the benefit of the JV.

The accumulation of these outstanding Nembe Creek Trunkline outstanding fees was attributed by Nembe to a confluence of severe operational challenges that have plagued Nigeria's oil and gas sector for several years. These difficulties included widespread crude oil theft, persistent pipeline vandalism, and general insecurity across the region. Additionally, the disruptions caused by the global COVID-19 pandemic further complicated operations.

These challenges significantly impacted crude transportation through the NCTL, making it increasingly difficult to accurately reconcile the volumes of crude delivered by individual operators. Prior to the EFCC's involvement, Nembe had undertaken numerous efforts to recover the outstanding payments. These attempts included issuing direct demands, dispatching formal correspondence, and engaging directly with the affected pipeline users. Despite these persistent efforts, a full settlement of the outstanding obligations remained elusive, ultimately paving the way for the EFCC's intervention.

The Economic and Financial Crimes Commission's subsequent intervention leveraged its statutory investigative and recovery powers to address these outstanding obligations. Nembe Exploration Production Company EFCC clarified that this action facilitated the recovery of funds that Nembe had already been actively seeking on behalf of the NNPCL Nembe JV pipeline fees. The company explicitly stated that the EFCC's involvement was directed at recovering money owed to the joint venture, rather than recovering funds from Nembe.

It was crucial for Nembe to underscore that it was the operator responsible for pursuing the outstanding payments for the JV, not the party in default of the underlying transactions. The company maintained that the recovery represented the settlement of payments for services already rendered, rather than indicating any wrongdoing or financial misconduct on its part. Furthermore, Nembe asserted that it was not indebted to the joint venture concerning the pipeline transportation fees in question, suggesting that past changes in EFCC leadership might have contributed to a misunderstanding of the circumstances and the roles of the parties involved in this EFCC oil pipeline recovery Nigeria.

This incident highlights the active and expanding role of the EFCC in addressing commercial debt recovery within Nigeria's critical oil and gas sector, particularly where joint ventures are involved. The fact that the EFCC intervened to recover outstanding Nembe Creek Trunkline outstanding fees for a JV underscores the commission's broad mandate and its willingness to apply its powers to ensure financial obligations are met, even in complex commercial arrangements. This case, involving Nembe Exploration Production Company EFCC and the NNPCL Nembe JV pipeline fees, provides a significant precedent for other operators.

For companies operating shared infrastructure or participating in joint ventures in Nigeria, this development emphasizes the critical importance of clear contractual terms and robust documentation. Such clarity is essential to prevent misinterpretation of roles and responsibilities, especially when external bodies like the EFCC become involved in debt recovery. The intervention serves as a reminder that the EFCC can act to recover funds owed to JVs, reinforcing the need for meticulous financial management and proactive debt recovery strategies to avoid such escalations.

Lawyers advising clients in the Nigerian oil and gas sector, particularly those in joint ventures or operating shared infrastructure, should note the EFCC's active role in recovering outstanding commercial debts. This case clarifies that the EFCC can intervene to recover fees owed to JVs, emphasizing the need for clear contractual terms and robust documentation to avoid misinterpretation of roles during such interventions.

Source: Original reporting via Nigerian news outlets.