Aiteo Eastern E&P Company Limited, a leading indigenous oil exploration firm founded by Nigerian billionaire oil mogul Benedict Peters in 2013, has found itself embroiled in a mounting debt crisis.
According to recent disclosures by the Nigerian subsidiary of British multinational oil company Shell Plc and seven local banks, the energy company owes a staggering $2.6 billion in oil-related loans.
This figure represents an increase of $910 million compared to its 2022 figure of $1.7 billion when Shell Plc initially reported the outstanding loans.
The lenders and Aiteo have been locked in a legal dispute since late 2019, when the creditors notified the company of its default.
The $2.6 billion debt can be traced back to Aiteo’s acquisition of a pipeline and operating interest in a highly valuable onshore oil block eight years ago.
Nigerian banks such as Zenith Bank Plc, Fidelity Bank Plc, and Guaranty Trust Bank Plc extended loans amounting to $1.5 billion to support the acquisition, while Shell provided $504 million in financing as the asset seller.
Since the initial loan agreement, Aiteo, Shell, and the Nigerian lenders have been embroiled in a protracted legal battle. Aiteo has claimed it has already repaid $1.2 billion and denies defaulting. However, the lenders argue that its outstanding debt has reached approximately $2.6 billion, factoring in interest, fees, and penalties.
Peters, renowned for his philanthropic endeavors, is seeking to resolve concerns and find a way forward for the project, marking a significant step in addressing the project’s setbacks.
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