British oil producer sees shares tumble 70% over loan fraud

London-listed oil producer Lekoil suspended trading in its shares amid a burgeoning scandal involving a loan from a company claiming to act on behalf of the Qatar sovereign investment fund.

Alliance News reports that Lekoil agreed to a $ 184 million loan with representatives from the Qatar Investment Authority earlier this month to be used for the development of an offshore field, Ogo, in Nigeria.

The funding, according to Energy Voice, was to go to drilling two exploration wells in the second half of this year. Lekoil is currently studying the area.

More than a week after Lekoil concluded the loan agreement, other representatives of the Qatari sovereign wealth fund approached the company to express suspicions about the validity of the loan. In the end, it was established that the Qatari Investment Authority was not aware of any loans with Lekoil.

“Lekoil is urgently seeking to establish, alongside his legal counsel and his designated counsel, all the facts in this matter, and pending this clarification, the company has requested that its common shares be suspended from trading on AIM with immediate effect, “said the company. this week.

The Financial Times reported that the loan agreement involved an intermediary: a Bahamas-based company called Seawave Invest. Seawave Invest connected Lekoil to people who claimed to be representatives of the QIA but, according to Lekoil, had “built a complex façade in order to impersonate representatives” of the fund. The company added that it had paid $ 600,000 to Seawave Invest.

The FT recalls that this is not the first time that a Nigerian oil company has had problems. In 2018, Lekoil’s partner in the Ogo field was found guilty of money laundering and fraud, for example. Lekoil bought Afren and currently owns 40% of the land. However, the company is looking to sell the 22.86% it bought from Afren. The operator and majority shareholder in the field is Nigerian Optimum.

By Irina Slav for Oilprice.com

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