Obaigbena accuses First Bank of breach of agreement in oil deal
The Chairman of General Hydrocarbons Limited (GHL), Prince Nduka Obaigbena, has accused First Bank of Nigeria of serious breaches of contract and misconduct in their joint oil exploration deal.
In a detailed letter addressed to the Governor of the Central Bank of Nigeria (CBN), Mr. Yemi Cardoso, dated November 7, 2024, Obaigbena outlined the origin of the dispute and accused FBN of failing to honour financial obligations under their agreements, leading to significant financial and reputational damage for GHL.
He claimed the conflict stemmed from a 2021 agreement between GHL and FBN, initiated to help the bank recover from a $718 million non-performing loan linked to Atlantic Energy Drilling Concept Nigeria Limited. GHL, which had acquired Oil Mining Leases (OMLs) 120 and 121, agreed to a profit-sharing arrangement with FBN to develop the fields and repay the bank’s obligations to the Asset Management Corporation of Nigeria (AMCON).
Obaigbena allegedly facilitated the partnership following discussions with FBN’s former chairman, Mr. Oba Otudeko, and other key executives. The agreement was formalized through a Memorandum of Understanding (MoU) and a tripartite deed involving FBN, GHL, and AMCON.
Despite the initial success of the arrangement, Obaigbena claimed FBN reneged on its commitments, causing operational delays and financial setbacks.
Key allegations include:
- Delayed Payments: GHL submitted over 70 utilization requests under the facility agreement, but FBN consistently delayed disbursements, sometimes taking up to 67 days instead of the agreed five days. This caused GHL losses amounting to $47 million and disrupted drilling operations.
- Operational Sabotage: FBN’s payment delays reportedly left workers stranded on a rig without basic necessities, forcing external companies to intervene to avert a potential international incident.
- Demands for Illegal Fees: Consultants tied to FBN allegedly solicited bribes from GHL, which the company refused to pay, citing corruption concerns.
- Data Breaches: FBN is accused of sharing privileged legal and financial information about GHL with third-party litigants, violating confidentiality agreements and global data protection standards.
- Unilateral Changes: Obaigbena also alleges that FBN introduced a “Framework Agreement” in 2024 that sought to appoint an independent asset manager, effectively sidelining GHL from its own operations and increasing costs by $30-$50 million annually.
- Loss of Assets: GHL reportedly lost access to the Blackford Dolphin rig due to FBN’s non-compliance, resulting in arbitration claims of over $100 million.
Obaigbena also claimed that GHL spent over $50 million of its own funds to maintain operations while awaiting FBN’s disbursements.
He further alleged that FBN’s tardiness jeopardized alternative financing opportunities, including a $53 million facility from Afreximbank, which FBN failed to facilitate.
In his letter, Obaigbena appealed to the CBN to investigate FBN’s actions and prevent further harm to GHL. He emphasized the need for accountability, particularly given the critical role GHL played in stabilizing FBN’s finances in 2021, saving the bank from a potential loss of ₦160 billion.
As of press time, FBN had not issued a public statement addressing the allegations.
