Court orders immediate handover of FPSO Tamara Tokoni 

By Philippine Duru

philippineobetoduru@gmail.com

08034905774

Nigeria’s oil and gas industry has recorded a significant legal development following a landmark judgment by the Supreme Court ordering the immediate handover of the Floating Production Storage and Offloading (FPSO) vessel Tamara Tokoni and the crude oil aboard it to General Hydrocarbons Limited (GHL), while setting aside the earlier judgment of the Court of Appeal that had placed the cargo under judicial custody.

The apex court’s decision effectively reverses a series of legal orders that had transferred control of the crude cargo to the Chief Registrar of the Court of Appeal and required proceeds from any sale to be held in an escrow account pending the determination of arbitration proceedings between GHL and First Bank of Nigeria over an alleged debt dispute.

The judgment marks a major victory for General Hydrocarbons in its long-running legal battle with First Bank and is expected to have far-reaching implications for secured lending, asset-backed financing, maritime law and commercial dispute resolution in Nigeria’s petroleum sector.

The dispute revolves around crude oil stored aboard the FPSO Tamara Tokoni, a production facility serving oil assets operated by General Hydrocarbons. First Bank had claimed that GHL owed approximately $225.8 million under loan arrangements secured with crude oil cargoes aboard the vessel.

Following the dispute, the bank obtained court orders aimed at preserving the cargo, leading to multiple proceedings before the Federal High Court and later the Court of Appeal. The appellate court had ordered that the crude cargo be protected, authorising its eventual sale with proceeds to be deposited in an interest-bearing escrow account under the custody of the Chief Registrar pending the conclusion of arbitration and related litigation.

General Hydrocarbons consistently challenged those orders, insisting that First Bank had breached the parties’ 2021 Subrogation Agreement and that no debt was outstanding. The company also argued that the bank improperly relied on ex parte orders to interfere with operations involving the crude cargo.

With the Supreme Court now nullifying the Court of Appeal’s decision, ownership and control of the FPSO and its crude cargo are to revert immediately to General Hydrocarbons.

Legal analysts say the ruling restores operational control of one of Nigeria’s important offshore production assets and removes uncertainty that had surrounded the handling of crude stored aboard the facility.

Industry observers believe the judgment could strengthen investor confidence by reinforcing the Supreme Court’s role in providing final certainty in complex commercial and maritime disputes involving strategic oil assets.

The decision is also expected to influence how financial institutions structure security arrangements for upstream oil financing, particularly where collateral consists of crude cargoes or offshore production facilities.

Energy experts note that prolonged legal disputes over producing assets can disrupt crude evacuation schedules, financing arrangements and investor confidence. The Supreme Court’s intervention is therefore seen as providing clarity that may enable normal operations to resume while allowing any outstanding commercial claims to be resolved through appropriate legal channels.

The case has attracted widespread attention across Nigeria’s financial and petroleum sectors because it involves one of the country’s leading commercial banks, a major indigenous upstream operator and billions of naira worth of crude oil assets.

Stakeholders are expected to study the full judgment closely to understand the court’s reasoning, particularly regarding maritime jurisdiction, secured creditor rights, arbitral proceedings and the extent of judicial powers over strategic petroleum assets.

The ruling is widely regarded as one of the most consequential judicial decisions affecting Nigeria’s oil and gas industry in recent years and is expected to shape future commercial litigation involving upstream financing, collateral enforcement and ownership disputes within the sector.