The Trinity Spirit ship explosion followed $200m trail of debt defaults

The owners of an oil-production and storage ship had a history of financial problems before the vessel blew up in Nigerian waters two months ago, Bloomberg has reported. The Trinity Spirit (IMO 7370325) exploded off the coast of Nigeria on February 2nd this year (IMN February 7th). The vessel burned for more than 24 hours and left a long sheen of crude oil in the Atlantic Ocean.

Idris Musa, director-general of Nigeria’s National Oil Spill Detection and Response Agency, has said that the event meant that only a low level of crude was spilled.

The Environment Ministry estimated that up to 60,000 barrels of oil were on board the ship at the time of the blaze.

It has emerged that creditors had filed lawsuits against the company operating the ship, Nigeria-registered Shebah Exploration and Production Co, in at least three countries, accusing the firm of defaulting on multiple financial agreements.

These include two bank loans for a combined $220m and a contract for the management of the vessel itself, according to court documents and corporate statements.

Ambrosie Bryant Orjiako, a prominent businessman and president of Shebah, acted as the personal guarantor of a $150m loan taken by the company in mid-2012 from the African Export-Import Bank and two Nigerian lenders to fund a drilling programme on the firm’s oil license. Shebah leased the vessel from one of its shareholders, Allenne Ltd, which is a company registered in the British Virgin Islands, of which Orjiako was a director, according to court filings.

Orjiako declined to comment to Bloomberg on any matters that were still before the court. He referred questions regarding the vessel to Shebah Chief Executive Officer

Ikemefuna Okafor, who didn’t respond to emails or calls.

Shebah stopped paying down the Afreximbank loan after meeting a single $6.1m instalment, according to a lawsuit filed by the lenders in the UK against the company, Allenne and Orjiako.

In February 2016 a judge ruled that the banks were entitled to $143.9m, which remains unpaid and has doubled with interest, Afreximbank said in a statement.

The banks “continue to consider their options for recovery,” Afreximbank said through its law firm Baker McKenzie.

Orjiako, 61, had argued that delays by Afreximbank in releasing the funding led to drilling contractors either withdrawing or withholding their services, according to a defence he submitted to the London court in September 2015.

A UK judge dismissed an appeal by Shebah and Orjiako against the decision in mid-2017.

Way back in 2004 Shebah acquired a 40% interest in a permit known as Oil Mining Lease 108 from ConocoPhillips, as Allenne purchased the Trinity Spirit from the Houston-based producer.

Shebah agreed to bear all costs in return for 80% of income from the block.

No production was recorded since 2017, according to data published by Nigeria’s state-owned energy company. The government announced in 2019 that it was revoking the permit, without specifying why.

Shebah has also been under pressure from other creditors. A federal court in Lagos last year granted Zenith Bank Plc, one of Nigeria’s largest lenders, an injunction preventing selected companies from dealing with Shebah’s assets in a dispute relating to a $70m loan provided in 2014 to Orjiako’s firm.

Houston-based oil services company Alliance Marine Services has stated that it terminated a contract to manage the Trinity Spirit after Shebah accumulated arrears of $5m, according to a case filed in a US federal court in 2009. The plaintiff said it had also initiated arbitration proceedings in the UK to try recover the money.

AMS voluntarily dismissed the lawsuit several months after commencing it and it’s not clear whether the dispute was resolved. Bloomberg was unable to reach AMS.

Shebah and two other companies connected to Orjiako were ordered by a UK court in 2020 to pay a Greek shipping company $4.3m after the trio defaulted on a 2017 agreement to charter a tanker.

In 2019 a federal court approved the appointment of a receiver by the state’s debt recovery agency, the Asset Management Corp of Nigeria (Amcon), to manage Shebah.

Before the fire the oil firm, which is still in receivership, had offered the Trinity Spirit to Amcon to reduce some of its debt, according to a spokesman for the government body.

Amcon is trying to recover a portion of the loans provided by local lenders in 2012, which the agency has since taken over from one of the three banks.

1976-built, Liberia-flagged, 132,995 gt Trinity Spirit is recorded by Equasis as being owned by Allenne Ltd, care of Alliance Marine Services of Houston, Texas, USA.