The Nation Newspaper

Tag: Malabu

  • The Malabu malfeasance

    NMMA winning entry (1): Below is one of the four entries sent in for the award. The Malabu story still reverberates across the globe today – from London to Rome and New York. This peculiarly Nigerian bogey must rank among the worst corruption cases in modern times. The real story, however, is that while it gives the rest of the world sleepless night, not so for Nigerians and her leaders who are marinated in it. It was first published Friday June 21, 2013.

    MOUTH-WATERING OIL BLOCK: It is a 15-year-old story showcasing Nigeria’s oil sector at its messiest, successive Nigerian governments at their puerile best, multinational oil companies at their shadiest and why Nigeria remains among the poorest countries in the world despite huge oil resources. It has gone on for so long in the hushed manner of Nigeria’s oil business until The Economist of London removed a bit of the veil on it last week (June 15, 2013 edition). It is a story of greed, brigandage and the grand-scale pillaging of a country as probably has never been witnessed in modern history. The sordid story concerns a mouth-watering oil block, OPL 245 awarded to a fictitious firm, Malabu Oil and Gas, which had no records, assets or staff.

    According to the report, Malabu was ‘established’ only a few days before it was handed this oil block estimated to have a possible 9 billion barrels of oil! A certain fellow called Dan Etete who was Nigeria’s Petroleum minister in 1998 must have awarded the oil block to himself and of course fronting for fellow rogues in government then including members of the Abacha clan. The dictator, General Sani Abacha, was Nigeria’s head of state then. This matter has dragged for so long because in the conclave of thieves, there is no speaking in low tones over a big loot; and this one is humongous. Therefore, the fight over it has been protracted between Etete and his gang; Shell/ENI and NNPC/the Presidency. The news today is that Shell/ENI after plodding through the murky tunnels of OPL245, finally shelled out the sum of $1.3 billion, verisimilitude of a bribe if not the real thing, to pay off all petty thieves, fraudsters and government officials who have cottoned on to this deal for 15 years.

    SHELL-SHOCKED AND UNASHAMED: Though Shell pretends to have dealt with the government of the day and also pretended that it paid out such huge sum to the Nigerian government, but the oil giant was well aware that it was dishing out slush fund into a “black hole”. It was a ‘pay’ brokered by (don’t be surprised) Mohammed Bello Adoke, Nigeria’s Attorney-General and Minister of Justice. Shell’s bounty, according to The Economist, may have been “round-tripped” back to bank accounts controlled by Nigeria’s public officials. The magazine says further: “Of the $1.1 billion, $800 million was paid in two tranches to Malabu accounts. This was then transferred to five Nigerian companies that appear to be shells. One of these, Rocky Top Resources, received $336.5m, some of which seem to have been passed to unknown “various persons”, according to the EFCC’s reports. Some $60m went to an account controlled by Mr. Etete who has said that he received $250m in total for his role in the deal…”

    Global Witness, the NGO that trails official corruption across the world, sees the OPL 245 affair as “a lesson in corruption.” If ever one had any doubt as to the ethical status of Shell, this singularly desperate deal has exposed it for what it has always been, a roguish multi-national.Shell remains the detestable British Empire still trading in Nigeria only by another name. It is a Luggardian behemoth that is divisive, corrosive, corrupt and corrupting. Over the years, Shell has been leveraging on Nigeria’s weak governments and lack of institutions to get away with mass murder, so to speak. Its home government seems to be hand-in-glove with her trading outfit making no efforts to rein it in. Unlike what obtains in the U.S. lately where multinationals are bound by corporate governance rules and laws of the U.S. (which is why many officials of multinationals operating especially in Nigeria have been convicted and jailed), it does not seem to be so in Britain and many E.U. countries.

    Shell which for more than 50 years has controlled over 60 per cent of Nigeria’s oil wealth was reprobate even in its dealings with the Niger-Delta environment in which it operates. After so many years, the region remains desolate, retarded and damaged. In cahoots with Nigeria’s renegade governments, Shell never made any comprehensive effort to lift and develop even its immediate vicinity of operation. It is acute deprivation that led to the restiveness and militancy which erupted in the last decade. Unfortunately, Shell is deeply engrained in the Nigerian morass that there seems to be no stopping it or changing its mindset – well, perhaps until the oil is drained.

    ETETE, NIGERIAN ELITE, NNPC AND A COUNTRY WITHOUT GOVERNMENT: The Economist’s report avers that Nigeria is “arguably the most complex environment of all,” to transact business. Please read the most corrupt environment of all. Nowhere else would a serving minister of petroleum award itself a juicy oil block using a ‘nonexistent’ company yet he is allowed to benefit immensely from such crass corruption helped by the country’s chief law officer, the attorney-general. Ratty Mr. Etete, typical Nigerian elite, had been convicted of money laundering in France; the huge sums being bribe money from foreign investors while he was in office. In a serious society, Etete ought to have been arrested, prosecuted and jailed, instead, he was allowed to profit hugely from a grand fraud he hatched and executed as a public official.

    Why has Nigeria grown into a banana republic? Because it ranks among the most corrupt countries of the world having maintained its position in the top five of the most corrupt table in the last decade. In the Malabu affair, those who ought to sanction the culprit became the chief beneficiaries; top government functionaries scrambled to get a share of the loot. Consider the list of Nigerians mentioned in this deal aside Dan Etete, there is notoriously corrupt Diepriye Alamieyeseigha who is the acclaimed boss of our sitting president. There is the Abacha family, Abubakar Aliyu and Adoke. Nigeria’s oil industry has become an elaborate fraud where serving government officials including heads of government scramble for and award oil blocks to themselves through proxies. Nigeria’s chief resource which ought to be developed for the good of all are handed to a few who become stupendously rich to the detriment of the populace.

    For a long while, Nigeria has lacked patriotic and purposeful leaders thus the country has been running literally on auto-pilot; without governments. This explains why the country has become so imperiled with a mass of jobless youths threatening to upend the ship of state. Sadly, those at the helm even now are so enamoured of immediate gains they are blind to the imminent danger. They seem to have lost any sense of right and wrong too. In other countries, this Malabu affair that has brought us so much international odium would have elicited judicial enquiries that would shake up the entire nation. Not so here, it has long been swept under the carpet because everybody is involved. Everybody, what a shame!`

    Would Okonjo-Iweala bite the bullet now?

    “Time for Okonjo-Iweala to go” is the title of a short piece in this column on January 31, this year. It was an early warning that Finance Minister and Coordinating Minister of the Economy, Dr. Ngozi Okonjo-Iweala had reached the end of her tether and therefore, should take a bow.

    The reasons adduced were: unduly high level of corruption in the system; over-bloated recurrent budget and subsequent poor formulation and implementation of annual budgets. Last Monday, the chief manager of our economy unilaterally declared something she termed “austerity measures” on the wings of our declining oil revenues. And she backed it up with the usual grandstanding and chest-thumping, speaking about a well-managed country and competent teams crafting a set of right policies to respond to shock.

    Well, it is our duty to remind her that in her Obasanjo days, her song was REFORM and in this era it has been TRANSFORMATION and see where we are today. She has been doodling with our economy for nearly a decade now and all she seems to have been doing is disbursal of monthly allocation. Today we face imminent damnation because she had no grand vision to revamp basic infrastructure like power, transportation, agriculture and even our oil and gas. None of these things that would have helped us diversify and grow the economy was put in place.

     Worst of all, she never was able to cut bloated government expenditure; we still import most of our petroleum products and most of our food and household needs. She has added no significant value to the economy over these years. All she has done is to sell crude and share proceeds. Even the production and merchandising of that sole product – crude oil has been such a messy affair in her time. Now crude prices are falling, a phenomenon that was long-foretold; Nigeria faces imminent doom and she tells us about crafting austerity measures, what a joke!

  • Malabu: APC asks Jonathan to come clean on another monumental scandal

    Malabu: APC asks Jonathan to come clean on another monumental scandal

    The All Progressives Congress (APC) has urged President Goodluck Jonathan to speak out and take action on the monumental Malabu oil scandal rocking his administration and putting Nigeria under the global searchlight as a corrupt nation.

    In a statement in Lagos yesterday by its National Publicity Secretary, Alhaji Lai Mohammed, the party said President Jonathan must end his silence on the matter since half of the $1.1 billion paid to Malabu Oil and Gas for oil field OPL 245 by two oil majors was allegedly used to bribe Nigerian officials, who in turn used the proceeds to buy jets and armoured limousines.

    It said since the deal to pay Malabu the huge money was brokered and defended by the Jonathan administration, it stands to reason that officials of the same administration will know one or two things, and perhaps are part and parcel of the whole scandal.

    “The only way to know for sure is if there is an independent investigation of the allegation, which has been published by the international media after Italian prosecutors intensified their probe into the deal. This is where President Jonathan comes in. He must allow an unfettered probe of this scandal that has again put Nigeria in bad light. Whatever happens, however, the names of those who received the bribes will soon be known, thanks to the determination of the UK and Italy to show that no one, who violates their laws, will go scot-free.

    “Just like the Halliburton and Siemens bribery scandals that were also exposed from abroad, this Malabu scandal has again damaged Nigeria’s standing in the comity of nations. While US, France, Italy and Germany have jailed officials and imposed fines on the foreign firms, which bribed Nigerian officials in the Halliburton and Siemens scandals, none of those who received the bribes here in Nigeria has been touched. The Malabu scandal must not go the same way,” APC said.

    The party said Nigeria has never had it as bad, in terms of runaway corruption that has cost the nation billions of dollars in money that would have gone into national development, as it is having under the Jonathan administration.

    “There is no better way to say this. The Jonathan administration is swimming in corruption and the President has allowed it to fester because his government is feeding fat on the proceeds of graft. He has even tried to use semantics to cover up the extent of sleaze, saying stealing is not corruption,” it said.

    APC said besides the Malabu, Halliburton and Siemens scandals, the Jonathan administration has done nothing to tell Nigerians what happened to the $20billion in diverted oil money; the multi-billion naira fuel subsidy fraud for which no person has been brought to justice; opaque crude swaps at the expense of encouraging domestic refinery; payment of billions of naira in kerosene subsidy without appropriation and the gargantuan police pension fraud.

    “Under your watch, Mr. President, there is massive looting of the commonwealth by the same people being paid by taxpayers to ensure a judicious utilisation of the scarce national resources. There is a growing culture of impunity because no one is punished for the looting. Now you have another chance to turn things around for the better.

    “The Malabu scandal provides such a chance. Those who collected millions of dollars in bribes in the illegal transaction must be identified and brought to justice. We must not allow foreign countries to be the ones exposing corrupt Nigerian officials. Our government must act like a responsible government by demonstrating it will not allow violation of its laws or encourage corruption,” the party said.

  • Our role in the $1.09b Malabu Oil mess, by Shell

    Our role in the $1.09b Malabu Oil mess, by Shell

    Shell Nigeria Ultra Deep Limited (SNUD) is in the centre of the Malabu Oil deal, for which it is being investigated by the British police. The Nation has obtained documents filed at the International Centre for Settlement of Investment Disputes in wh

     

    The controversy over the $1.092, 040,000 Malabu Oil deal continues with one of the parties, Shell Nigeria Ultra Deep Limited (SNUD) opening up on how it acquired 40 per percent equity in Oil Prospecting Licence (OPL) 245 in 2000.

    The company insisted that it followed due process and consulted with relevant officials in the administration of ex-President Olusegun Obasanjo.

    It also claimed that it received verbal assurances from the then Vice-President Atiku Abubakar that there was no objection from the Federal Government to Shell acquiring an interest in OPL 245.

    It attributed the current crisis to the withdrawal of the allocation of OPL 245 to Malabu in July 2001 and how Obasanjo allegedly made a u-turn on March 25, 2002 leading to threats of legal action from Malabu Oil and Gas.

    Shell admitted that the revocation of the oil block was shocking as “no explanation was given”. The Anglo-Dutch firm said it paid $210million as signature bonus for the oil block and operates the block on a Production Sharing Contract (PSC) basis.

    It said S$ 209 million of the $210million signature bonus had remained in an escrow account ever since and with accruing interest; it grew to S$231, 299, 884.04 as of February 2008.

    These facts were contained in a Claimant’s Memorial filed by SNUD before the International Centre for Settlement of Investment Disputes.

    A copy of the Memorial was exclusively obtained yesterday by our correspondent.

    The memorial is expected to be tabled before the UK Police which has stepped into the investigation of the Malabu Oil deal.

    The memorial said: “In 1998, during the Gen. Sani Abacha military regime, OPL 245 had been allocated to Malabu on behalf of the Ministry of Petroleum Resources by Mr. Dan Etete in his capacity as the then Presidential Adviser on Petroleum and Energy. Malabu was an indigenous Nigerian company, incorporated on 24 April 1999, with Nigerian shareholders, apparently for the purpose of petroleum prospecting.

    “In March 2000, Malabu approached Shell within a farm-in proposal. Malabu was looking for an international oil company to take a 40% equity stake in the OPL 245 licence itself and ‘carry’ Malabu in developing the block i.e. the international oil company would take all the exploration and development risk by funding Malabu’s share of the costs (including the acquisition, exploration and development costs of the block) as well as its own.

    “Those costs would then be recovered by the international oil company from Malabu’s share oil production.

    “Malabu’s representative provided Shell with a technical information brochure relating to OPL 245 and copies of the letter of allocation of OPL 245 to Malabu dated 29 April 1998, a letter to the DPR attaching cheques in respect of the US$2m “down payment” of the signature bonus and other fees and a letter confirming that the allocation had not been withdrawn dated 9 March 2000.

    “At that time, several other oil exploration and development licences allocated by the Abacha regime had been withdrawn by the new civilian Government of President Obasanjo.

    “Shell made enquiries from the Assistant Director of the DPR, Mr. Andrew Obaje, on 31 March, 2000. He confirmed to Shell that OPL 245 had been owned by Malabu since April 1998 and was currently in good standing.

    “Obaje told Shell that the FGN did not intend to revoke the allocation because Malabu had paid all the required fees and part (US$2.04 million) of the US$20 million signature bonus for the block. The map of allocated concessions obtained from the DPR also indicated that Malabu was the owner of OPL 245.

    “Nevertheless, Shell decided to pursue negotiations with Malabu. On 4 October, 2000, Shell was approached by a new Malabu representative. He was known to Shell, because he had been employed as the Managing Director of Texaco in Nigeria until his retirement in mid-2000.

    “Shell received verbal assurances from the then Vice-President of Nigeria that there was no objection from the FGN to Shell acquiring an interest in OPL 245.”

    SNUD also released the details of its agreement with Malabu Oil and Gas.

    The document added: “On 24 January 2001, Malabu and Shell executed a Heads of Agreement (“HoA”). The HoA set forth the major principles of agreement between Shell and Malabu regarding OPL 245.

    “In the HoA, the parties ‘acknowledged that there (would) be …. other items of significance to be negotiated in final definitive commercial agreement(s) in connection with the transaction proposed (therein) (thereafter) referred to as the (“Definitive Agreements”)”;

    “Malabu agreed to Shell holding a 40% interest in OPL 245 and being appointed contractor in respect of the licence, that Shell would pay, to and on behalf of Malabu, various amounts and that Shell would ‘carry’ Malabu.

    “Once the HoA was finalised and signed, work began on the Definitive Agreements, which included:

    “The Definitive Agreements were intended to govern the parties’ relationship for the duration of the OPL 245 farm-in.

    “The Farm-In-Agreement was to provide the basis for the farm-in-agreement whereby SNUD would acquire a 40% interest in OPL 245, based on certain representations and warranties by Malabu, in return for making specified payments to or for Malabu.

    “The OPL 245 Deed of Agreement was the actual instrument that would effect the assignment of a 40% interest in OPL 245 from Malabu to SNUD.

    “The Operating Agreement was to define the parties’ respective rights and obligations in operating OPL 245 and in connection with OPL 245 itself.”

    On how the disputes over

    the oil block came up,

    SNUD linked it to the withdrawal of the allocation of OPL 245 to Malabu.

    Shell said: “On 6 April 2001, Shell delivered the signature bonus cheque in the sum of $17,960.000 and the Deed of Assignment and other Definitive Agreements, to Mr. Macaulay Ofurhie (Director of the DPR) and Mr. W.A Obaje (Assistant Director of the DPR) in person.

    “Upon receipt of those items, Mr. Ofurhie acknowledged that OPL 245 was still in good standing and Mr. Obaje stated that the allocation was valid for ten (10) years from April 1998.

    “On 12 April 2001, Shell learnt that Malabu had received a letter dated 9 April 2001 from the DPR granting OPL 245 to it, authorizing it to commence operations and confirming that the Deed of Assignment was due to be forwarded to the President of the Federal Republic of Nigeria(FRN) for approval early the following week.

    “On 20 April 2001, Malabu told Shell that the DPR had confirmed that the conveyance of title had been signed by the President of the FRN and the Deed of Assignment would be approved very soon.

    “Seven days later, on 27 April 2001, Shell was informed that the Deed of Assignment had been approved by the FGN and was for allocation at the DPR.

    “On 24 may 2001, Malabu received the signed title deed of OPL 245 together with the co-ordinates of the licence area.

    “However, in approximately mid-June, reports appeared in the Nigerian press suggesting that –notwithstanding the assurances Shell had received from Malabu and the results of its own due diligence-certain individuals whose names were not contained in any official records were claiming an interest in Malabu and/or OPL 245.

    “In early July 2001, Shell received news that the FGN had withdrawn the allocation of OPL 245 to Malabu.

    The Federal Government’s letter of withdrawal of July 2, 2001 stated that: “I, (the Director of Petroleum Resources) have been directed to inform you that the allocation of OPL 245 to Malabu has been withdrawn and the issued title deed has been revoked. You are therefore required to return the title deed of the block in your possession to the Department of Petroleum Resources please”.

    “The FGN’s revocation was a shock to Shell as no explanation was given but Shell continued to hope that Malabu (together with Shell’s assistance) could reverse the FGN’s revocation. Shell did all it could do to assist Malabu to reverse the FGN’s decision.

    “Shell heard no more substantive developments until 19 February 2002 when Malabu representative informed Shell that he was still confident that things were on the right track at all levels in FGN.”

    SNUD gave further insights into how Obasanjo made a u-turn on the oil block and Malabu Oil and Gas threatened legal action.

    It said: “On 25 March 2002, a Shell representative was suddenly and unexpectedly summoned to meet with President Obasanjo in Abuja the following day.

    “Chief Olusegun Obasanjo (the President of the FRN), Mr. Obaseki, Mr. Kayode Are (the Director General of the State Security Service), Mr. Funsho Kupolokun (Special Assistant to the President of the FRN on Petroleum Matters) and a representative from ExxonMobil were all present.

    “At the meeting, the President of the FRN informed Shell and ExxonMobil that OPL 245 would not be returned to Malabu and that Shell and ExxonMobil would instead be invited to bid competitively not for the role of licence-holder (as Malabu had been) but rather for the role of contractor for OPL 245 with NNPC holding the licence.

    “The President of the FRN said there was to be a simple and transparent competitive bidding procedure whereby Shell and ExxonMobil would submit sealed bid containing a proposed signature bonus and the highest bid would win the right to develop the block in accordance with the terms of a PSC. (As noted above, very few oil and gas companies had the experience in drilling in “ultra –deep” water, Shell and ExxonMobil being two).

    “On 7 April 2002, Shell received a formal invitation to bid, dated 5 April 2002, together with the Guidelines for Competitive Bidding on Block 245 from the Office of the Special Adviser to the President on Petroleum Matters.

    “Shell learnt that, following the invitation to bid, Malabu wrote directly to the FGN on 9 April 2002 threatening to commence legal proceedings.

    “In response to that threat, on 29 April 2002, the Office of the Presidential Adviser on Petroleum and Energy wrote to Shell to confirm that: The Federal Government has revoked the prior award of this block to Malabu oil and Gas Limited.

    “The decision to revoke the award was made solely in the best interest of the Federal Government in reliance on its rights under law and without any influence from your company or its affiliates or anyone else.”

    Further to Federal Government ’s letter, on May 6, 2002, Shell wrote to Malabu setting out its position as to the frustration of the HoA and the Farm-In-Agreement and also giving notice of termination of both agreements.

    “On 13 May 2002, Shell submitted its bid for the role of Contractor for OPL 245 on the basis of a PSC to which NNPC was the contractual counterparty

    “On 23 May 2002, the Ministry of Petroleum Resources wrote to SNUD to confirm that it had been successful with its bid. The letter stated that:

    “The allocated block would be operated on a “Production Sharing Contract” (PSC) basis. The Nigerian national (sic) Petroleum Corporation shall be the Concessionaire, while your company shall be the contractor”.

    “The PSC was executed and approved by the Presidential Advisor on Petroleum and Energy for and on behalf of Minister of Petroleum Resources, on 22 December 2003.

    “Under the terms of the PSC, SNUD obtained the “exclusive right” to conduct Petroleum Operations (i.e. the winning or obtaining and transportation of petroleum or chargeable oil in Nigeria by drilling, mining, extracting or other like operations and all operations incidental thereto and any sale of or any disposal of dischargeable oil) in the area of OPL 245 for a period of 30 years.

    “The conditions of the approval were that SNUD would act as contractor, pay a signature bonus of US$210 million and operate the block on a PSC basis with the NNPC as concessionaire and SNUD as Contractor.

    Shell disclosed that it had

    so far invested $535.9 mil

    lion in the controversial oil block.

    “Following the execution of the PSC with NNPC, SNUD undertook major work and incurred substantial expenditure in connection with OPL 245.

    “SNUD paid the signature bonus of US$ 210 million in December 2003. SNUD paid $1 million via bank draft on 23 December 2003. SNUD paid the remaining US$ 209 million into an escrow account pursuant to an Escrow Agreement with the FGN (as represented by the Ministry of Finance) and JP Morgan Chase which was signed on 22 December 2003.

    “The total amount incurred in developing OPL 245 amounts to over $535.9 million. SNUD has borne all the risks attendant upon the exploration and appraisal of the OPL 245 area.”

     

    ich Shell explains how it was caught in the Malabu web. Managing Editor, Northern Operation YUSUF ALLI reports.

  • How $1bn Malabu Oil deal was struck

    How $1bn Malabu Oil deal was struck

    •Abacha, Obasanjo, Yar’Adua, Jonathan connections revealed
    • US, UK envoys get details of the agreements

    Federal Government’s inconsistency in the allocation and revocation of Oil Prospecting Licence (OPL 245) between 1998 and 2001 is largely responsible for the controversy surrounding the payment of $1.092 billion to Malabu Oil, according to fresh details of the deal obtained yesterday.

    The payment to the company owned by a former Minister of Petroleum Resources, Chief Dan Etete, bordered on violation of agreement.

    Though the contract was first awarded by the late General Sani Abacha, it has been a recurring decimal through the subsequent administrations of Olusegun Obasanjo, Umaru Yar’Adua and Goodluck Jonathan.

    The Resolution Agreements signed by the Federal Government with Malabu Oil, Shell Nigeria Ultra-Deep Limited, (SNUD) and Shell Nigeria Exploration and Production Company Nigeria Limited (SNEPCO) were approved by President Jonathan in 2011 following the amicable settlement of suits relating to OPL at the International Centre for the Settlement of Investment Disputes (ICISD Arbitration).

    Signatories to the Malabu and SNUD Resolution Agreements, based on an April 29, 2011 presidential directive, were the then Minister of Finance, Mr. Olusegun Aganga ( now Minister of Trade and Investment); Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke; Attorney-General of the Federation, Mr. Mohammed Bello Adoke ( SAN); Vice-Chairman /Managing Director and Company Secretary of SNUD; and the then Group Managing Director of NNPC, Austin Oniwon and Company Secretary/ Legal Adviser, Director and Secretary of SNEPCO.

    In its Claimant’s Memorial before the International Centre for Settlement of Investment Disputes, Shell Ultra Deep Limited named those who were involved or intervened at various stages in the OPL 245 dispute with Malabu Oil and Gas as Obasanjo; ex-Minister of Petroleum Resources, Chief Edmund Daukoru; Ex-NNPC GMD, Gaius Obaseki; former DG of SSS, Col. Kayode Are; Special Assistant to the President on Petroleum Matters, Mr. Funsho Kupolokun; NAPIMS; JP Morgan; a board member of Royal Dutch Shell, Mr. Malcom Brinded; the then Director of DPR, Mr. Macaulay Ofurhe; and Assistant Director of DPR, Mr. Andrew Obaje

    It was gathered last night that copies of the Malabu Oil Agreements had been forwarded by government to the British High Commissioner in Abuja and the US Ambassador.

    The British Police had indicated interest in probing the deal.

    Besides, principal officers of the National Assembly have been served copies of the agreements to enable them understand what a source described as reasons for the decision of government to resolve the disputes over OPL 245 instead of allowing the oil block lie fallow.

    An introductory note on the controversy gave insight into how Malabu Oil and Gas became a stakeholder in the petroleum sector.

    It said: “Records indicate that Malabu, an indigenous Oil and Gas company was allocated OPL 245 in April 1998 by the FGN in furtherance of its Indigenous Exploration Programme Policy introduced in the early 1990s to encourage effective development of indigenous capability in the upstream factor of the oil industry.

    “Malabu and other indigenous Oil and Gas companies were accordingly allocated Oil Blocks which they were expected to develop in partnership with international oil companies as Technical Partners.

    “Malabu had in accordance with the terms of the grant, appointed Shell Nigeria Ultra Deep Limited (SNUD) as its Technical Partner.”

    One of the agreements, shedding light on how the deal was struck, said: “Whereas on the 29th of April 1998, the Federal Government of granted an Oil Prospecting Licence (OPL 245) over oil block 245(Block 245 to Malabu.

    “On 30th March 2001, Malabu and Shell Nigeria Ultra Deep Limited (SNUD) entered into a Farm-in Agreement, and a Deed of Assignment under which Malabu assigned 40 per cent equity interest in OPL 245 to SNUD.

    “On the 2nd July 2001, FGN revoked OPL 245. By a letter dated the 23rd May 2002, the then Honourable Minister of Petroleum Resources, on behalf of FGN awarded Block 245 to SNUD on the basis of a Production Sharing Contract (PSC) following a competitive bid with another international oil company, on the invitation of the FGN.

    “On 22nd December 2003, Nigerian National Petroleum Corporation (NNPC) executed a PSC with SNUD (hereinafter referred to as the 2003 PSC ) granting SNUD the right to exclusively operate Block 245 as contractor for a term of 30 years.

    “Subsequent to the revocation referred to in paragraph C above and the execution of the 2003 PSC, various law suits involving FGN, Malabu, and SNUD, were filed to determine disputes arising from the revocation of OPL 245 by the FGN, the termination of the agreements between Malabu and SNUD and the execution of the 2003 PSC in respect thereof, with SNUD.

    “On 30th November 2006, the FGN executed a settlement agreement with Malabu wherein the FGN, without admission of liability for any alleged wrongful, unlawful, unjust or any like conduct agreed to re-allocate Block 245 to Malabu in consideration of Malabu discharging and releasing the FGN from all claims and suits filed by Malabu against the FGN in connection with the revocation of Malabu’s interest on 2nd July 2001.

    “As a result of the execution of the settlement agreement, a number of dispute resolution proceedings were initiated by SNUD against FGN and/ or Malabu, including Bilateral Investment Treaty (BIT) arbitration No. ARB/07/8 pending at the International Centre for the Settlement of Investment Disputes ( ICSD Arbitration) to enforce SNUD’s rights to exclusively operate Block 245 as Contractor on the basis of the2003 PSC beaten NNPC and SNUD.

    “The cases remaining between FGN, Malabu and SNUD are (I) CA/A/25M/ 2003- SNUD vs. The House of Representatives and Malabu ; (ii ) ICC No. 12136 MS(C12137 MS) SNUD vs. Malabu ( Arbitration with resulting award in favour of SNUD delivered on 20th December 2004 and costs of $2.735million awarded against Malabu; iii FHC/NRJ/ 01/2009-SNUD vs. Malabu, by which the ICC Award was registered on 29 March 2010, making it enforceable in Nigeria; iv ICSD Case No. ARB/07/18-Bilateral Investment Treaty arbitration between SNUD and the FGN (Ruling pending).

    “On 2nd July 2010, FGN again issued a letter to Malabu, re-allocating Block 245 to Malabu. FGN has decided to resolve its differences with Malabu amicably with respect to Block 245.

    “Pursuant to paragraphs above and with the full concurrence and agreement of Malabu, FGN is willing to reallocate Block 245 to Nigerian Agip Exploration Limited (NAE) and Shell Exploration and Production Company Limited (SNEPCO) in accordance with the terms of a reallocation agreement of even date to be entered into between FGN, SNUD, SNEPCO, NAE AND NNPC (Reallocation Agreement).

    “Now therefore, FGN and Malabu have agreed as follows with respect to Block 245:

    “All existing, claimed, asserted or disputed rights and privileges of Malabu, contracts and arrangements arising from or pursuant to Blick 245 whether such rights and privileges existed, are claimed, asserted or disputed among themselves, or against the whole world ( including SNUD or any party claiming through SNUD) shall at the Execution Date, be substituted by the following arrangement.

    “FGN agrees to pay to Malabu subject to Clause 2 and 3, the sum of US $1.092,040,000 in full and final settlement of any and all claims, interests or rights relating to or in connection with Block 245.

    “Malabu, as stipulated in Clause 4 herein settles and waives any and all claims, interests, or rights relating to or in connection with Block 245 and hereby consents to the reallocation of the interests in Block by the FGN as granted in Clause 1.3 herein.”

     

  • Reps invite Adoke over $1.092b Malabu oil deal

    Reps invite Adoke over $1.092b Malabu oil deal

    The  House of Representatives has invited Attoney-General and Justice Minister Mohammed Adoke over a letter purportedly written to a foreign organisation, Global Witness, saying that the House has cleared him of any wrong doing in the $1.092 billion Malabu Oil Deal.

    The anti- corruption organisation indicted Adoke in its request for immediate action to recover the $215million of assets being disputed by EVP and Malabu. The assets are currently been frozen by the UK High Court”.

    The House has mandated its Committee on Justice to invite Adoke to find out if its true that he wrote such a letter and also to ascertain if the letter as he claimed is from the House and what the content of the letter is.

    The committee is to report back within a week.

    Part of the letter allegedly written by Adoke reads:

    “You may wish to note that the House of Representatives of the Federal Republic of Nigeria had instituted a probe into the transaction and, at the end, they were satisfied that there was no infraction on the constitution or any other Nigerian law.

    “While I thank you for the concern shown in respect of the transaction, I wish to state that since the OPL 245 resolution agreement did not breach the constitution or any extant law and was approved by all relevant authorities and persons, I am therefore unable to justify the call for investigation of the officials of the Ministry of Finance or indeed any other person or authority.

    “In view of the foregoing, I wish to reiterate that the settlement relating to OPL 245 did not breach the constitution of the Federal Republic of Nigeria 1999 and/or any extant law. The transaction was completely transparent and received the approval of relevant authorities and persons.”

     

     

     

     

     

  • The Malabu malfeasance

    MOUTH-WATERING OIL BLOCK: It is a 15-year-old story showcasing Nigeria’s oil sector at it messiest, successive Nigerian governments at their puerile best, multinational oil companies at their shadiest and why Nigeria remains among the poorest countries in the world despite huge oil resources. It has gone on for so long in the hushed manner of Nigeria’s oil business until The Economist of London removed a bit of the veil on it last week (June 15, 2013 edition). It is a story of greed, brigandage and the grand-scale pillaging of a country as probably has never been witnessed in modern history. The sordid story concerns a mouth-watering oil block, OPL 245 awarded to a fictitious firm, Malabu Oil and Gas which had no records, assets or staff.

    According to the report, Malabu was ‘established’ only a few days before it was handed this oil block estimated to have a possible 9 billion barrels of oil! A certain fellow called Dan Etete who was Nigeria’s Petroleum minister in 1998 must have awarded the oil block to himself and of course fronting for fellow rogues in government then including members of the Abacha clan. The dictatator, General Sani Abacha was Nigeria’s head of state then. This matter has dragged for so long because in the conclave of thieves, there is no speaking in low tones over a big loot; and this one is humongous. Therefore, the fight over it has been protracted between Etete and his gang, Shell/ENI and NNPC/the presidency. The news today is that Shell/ENI after plodding through the murky tunnels of OPL245, finally shelled out the sum of $1.3 billion, verisimilitude of a bribe if not the real thing, to pay off all petty thieves, fraudsters and government officials who have cottoned on to this deal for 15 years.

    SHELL-SHOCKED AND UNASHAMED: Though Shell pretends to have dealt with the government of the day and also pretended that it paid out such huge sum to the Nigerian government but the oil giant was well aware that it was dishing out slush fund into a “black hole”. It was a ‘pay’ brokered by (don’t be surprised) Mohammed Bello Adoke, the Attorney-General and Minister for Justice. Shell’s bounty according to The Economist, may have been “round-tripped” back to bank accounts controlled by public officials. The magazine says further: “Of the $1.1 billion, $800 million was paid in two tranches to Malabu accounts. This was then transferred to five Nigerian companies that appear to be shells. One of these, Rocky Top Resources, received $336.5m some of which seem to have been passed to unknown “various persons”, according to the EFCC’s reports. Some $60m went to an account controlled by Mr. Etete who has said that he received $250m in total for his role in the deal…”

    Global Witness, the NGO that trails official corruption across the world sees the OPL 245 affair as “a lesson in corruption.” If ever one had any doubt as to the ethical status of Shell, this singularly desperate deal has exposed it for what it has always been, a roguish multi-national. Shell remains the detestable British Empire still trading in Nigeria only by another name. It is a Luggardian behemoth that is divisive, corrosive, corrupt and corrupting. Over the years, Shell has been leveraging on Nigeria’s weak government and lack of institutions to get away with mass murder, so to speak. Its home government seems to be hand-in-glove with her trading outfit making no efforts to rein it in. Unlike what obtains in the U.S. lately where multinationals are bound by corporate governance rules and laws of the U.S. (which is why many officials of multinationals operating especially in Nigeria have been convicted and jailed), it does not seem to be so in Britain and many E.U. countries.

    Shell which for more than 50 years, has controlled over 60 per cent of Nigeria’s oil wealth was reprobate even in its dealings with the Niger-Delta environment in which it operates. After so many years, the region remains desolate, retarded and damaged. In cahoots with Nigeria’s renegade governments, Shell never made any comprehensive effort to lift and develop even its immediate vicinity of operation. It is acute deprivation that led to the restiveness and militancy which erupted in the last decade. Unfortunately, Shell is deeply engrained in the Nigerian morass that there seems to be no stopping it or changing its mindset – well, perhaps until the oil is drained.

    ETETE, NIGERIAN ELITE, NNPC AND A COUNTRY WITHOUT GOVERNMENT: The Economist report avers that Nigeria is “arguably the most complex environment of all,” to transact business. Please read the most corrupt environment of all. Nowhere else would a serving minister of petroleum award itself a juicy oil block using a ‘nonexistent’ company yet he is allowed to benefit immensely from such crass corruption helped by the country’s chief law officer, the attorney-general. Ratty Mr. Etete, typical Nigerian elite, had been convicted of money laundering in France; the huge sums being the bribe money from foreign investors while he was in office. In a serious society, Etete ought to have been arrested, prosecuted and jailed, instead, he was allowed to profit hugely from a grand fraud he hatched and executed as a public official.

    Why has Nigeria grown into a banana republic? Because it ranks among the most corrupt countries of the world having maintained its position in the top five of the most corrupt table in the last decade. In the Malabu affair, those who ought to sanction the culprit became the chief beneficiaries; top government functionaries scrambled to get a share of the loot. Consider the list of Nigerians mentioned in this deal aside Dan Etete, there is notoriously corrupt Diepriye Alamieyeseigha who is the acclaimed boss of our sitting president. There is the Abacha family, Abubakar Aliyu and Adoke. Nigeria’s oil industry has become an elaborate fraud where serving government officials including heads of government scramble for and award oil blocks to themselves through proxies. Nigeria’s chief resources which ought to be developed for the good of all are handed to a few who become stupendously rich to the detriment of the populace.

    For a long while, Nigeria has lacked patriotic and purposeful leaders thus the country has been running literally on auto-pilot; without governments. This explains why the country has become so imperiled with a mass of jobless youths threatening to upend the ship of state. Sadly, those at the helm even now are so enamoured of immediate gains they are blind to the imminent danger. They seem to have lost any sense of right and wrong too. In other countries, this Malabu affair that has brought us so much international odium would have elicited judicial enquiries that would shake up the entire nation. Not so here, it has long been swept under the carpet because everybody is involved. Everybody, what a shame!