Reports from the Financial Post indicate that a debt that Shell Plc and seven Nigerian banks are owed by renowned Nigerian domestic oil producer in relation to a 2015 asset sale has shot up to about $2.6 billion.

In 2015, Aiteo Eastern E&P Co. purchased a pipeline and an operating interest in one of the nation’s most lucrative onshore oil blocks for $2.4 billion.

To enable the purchase, Zenith Bank Plc, Fidelity Bank Plc, Guaranty Trust Bank Plc and other local lenders loaned the company $1.5 billion to support the acquisition, while Shell; the seller of the permit provided $504 million in funding.

The parties have been locked in a legal dispute since late 2019 when the creditors notified Aiteo that it was in default.

The lenders’ position is that Aiteo’s outstanding debt has climbed to about $2.6 billion once interest, fees and penalties are included, said the people who asked not to be identified because the matter is the subject of litigation and arbitration, and discussions between the parties are confidential.

The figure stood at $1.7 billion at the end of 2021 and $910 million a year earlier, according to statements made by the creditors in court and arbitration filings.

In a court filing in 2019, Aiteo mentioned that it had already repaid a staggering amount of $1.2 billion and denied being in default, however, the company refused to publicly comment on the issue. Shell and the other lenders either declined to comment or didn’t respond to emailed questions.

EAN/BB