March 18, 2017

$1.2bn Malabu scam: Nigeria loses Africa’s biggest oil block to Shell, Agip

$1.2bn Malabu scam: Nigeria loses Africa’s biggest oil block to Shell, Agip

*Oil rig

By Ikechukwu Nnochiri

THE Federal Govern-ment has lost ownership of controversial Oil Prospecting License, OPL, 245 to Shell and Agip in what appeared to be a  surprise court ruling.

The development was sequel to a ruling by the Abuja Division of the Federal High Court, yesterday which vacated the order that granted the government interim ownership of the disputed OPL 245 regarded as one of the biggest oil blocks in Africa.

Justice John Tsoho discharged the interim forfeiture order he issued in favour of the federal government on January 26, following applications by two multinational oil giants, Shell Nigeria Exploration & Production Company Ltd and Nigeria Agip Exploration Ltd.

Shell and Agip had in their applications, challenged the legality of the interim forfeiture order that stripped them of their ownership of the controversial oil bloc which the government alleged was fraudulently awarded to Malabu Oil & Gas Ltd.

*Oil rig

The Economic and Financial Crimes Commission, EFCC, had insisted that OPL 245 was awarded to Malabu Oil & Gas Ltd in 1998 by the late military dictator, General Sani Abacha, against regulations.

EFCC, in a motion, marked FHC/ABJ/CS/14/2017, told the court that investigations revealed that Malabu Oil & Gas Ltd and SPDC secured OPL 245 through a fraudulent scheme involving high scale bribery and corruption by top management of the company and some government officials.

In a 21-paragraph affidavit by one of its operatives, Mr. Ibrahim Ahmed, the agency told the court that the Italian Police had also conducted an extensive investigation into the alleged fraud committed by Shell Nigeria, Agip, and Malabu Oil & Gas Ltd, culminating in a criminal charge at the Ordinary Court of Milan.

On the basis of an ex-parte motion by the commission, Justice Tsoho, on January 26, ordered both Shell and Agip to temporarily hands-off the disputed oil bloc pending the prosecution of all individuals and firms indicted in the $1.2billion Malabu oil fraud.

However, at the resumed proceeding on the matter on Friday, the interim forfeiture order was discharged, even though the court agreed with the EFCC that it was permissible and constitutional for the federal government to seek an order of interim forfeiture of the OPL 245 since it was already a subject of two pending criminal charges.

Similarly, the court upheld arguments by both Shell and Agip that the ex-parte application upon which the interim forfeiture order was sought and obtained, was legally defective.

Justice Tsoho further dismissed as lawless and gross abuse of judicial process, an application that Malabu Oil & Gas Ltd filed to be joined as an interested party in the matter that was already fixed for ruling. Malabu had insisted that it has vested right on the contentious oil bloc, saying its interest would be affected by whatever decision the court arrived at.

It prayed the court to allow it to also present its own side of the case before ruling on the applications by Shell and Agip.

In his ruling, Justice Tsoho berated the firm for attempting to reopen argument on a matter that was already okayed for ruling.

The Judge held that having vacated the interim forfeiture order it issued to the federal government, there is no longer a suit on the matter pending before it.

It said the parties were at liberty to file a substantive action to resolve the dispute in relation to OPL 245.

EFCC had told the court that the Italian government was also prosecuting some persons and firms over the $1.2bn Malabu deal.

It averred: “That the Italian Police in the charge are prosecuting Royal Dutch Shell Plc, Eni Spa and one Scaroni who was its Managing Director, Descalzi was also the General Manager Exploration of Eni. A copy of the charge is hereby attached and marked as exhibits EFCC 4.

“Those also being prosecuted are one Casula and Armana who were senior executives of Nigeria Agip Oil Company and one Pegano who was the Managing Director of Nigeria Agip Oil Companies, one Dan Etete (former Minister of Petroleum) and other co-conspirators.”

Tracing the origin of the case, EFCC told the court that after Abacha “fraudulently” awarded OPL 245 to   Malabu Oil & Gas Ltd in 1998, it said the company contracted Shell Petroleum and SNEPCO, in a joint venture scheme, to operate the licence.

“That to the knowledge of Shell, the allocation of the Oil well and the procedure adopted by the owners of Malabu Oil and Gas Ltd was fraught with fraud but it went ahead to consummate the transaction”.

It said that a former Minister of Petroleum, Chief Dan Etete, who is reportedly the owner of Malabu Oil & Gas Ltd, and Nigerian Ambassador to the United State of America between 1996 and 1999, Hassan Adamu, were at the centre of the alleged oil bloc fraud.

The anti-graft agency said the federal government, on July 2, 2001, withdrew the title and allocation of the oil bloc from Malabu Oil and Gas Ltd on the directive of then Presidential Adviser on Petroleum to President Olusegun Obasanjo, after which it was re-allocated to Shell Nigeria Ultra Deep Ltd.

However, following a legal action Malabu instituted against the government over the revocation of the oil bloc license, it was re-awarded OPL 245, after an alleged shady out-of-court-settlement deal was brokered among all parties.

EFCC told the court that Shell and Agip again went into a fraudulent agreement with Malabu Oil & Gas Ltd, in which the companies will pay a signature bonus of $210m to FG while the sum of $1.2bn would be paid to the owners of Malabu Oil and Gas Ltd.

It said the $1.2bn was bribe paid to Etete and his cronies, adding that Shell was at that time aware that the ex-Petroleum Minister and owner of Malabu Oil and Gas Ltd was already a convict.

It alleged that immediate past Attorney-General of the Federation and Minister of Justice, Mr. Mohammed Bello Adoke, SAN, conspired with Shell and Agip to route the bribe through the federal government Escrow Account with JP Morgan Chase Bank in London.

“That sometime in May 2011, Nigeria Agip Exploration and SNEPCO instructed Chase Bank to release the said $1, 092, 040, 000 USD into Escrow Account of the Federal Government.

“That the said money on the instruction of the then AGF, Mohammed Adoke, was transferred from the Escrow Account to two banks namely First Bank and Keystone Bank operated by Dan Etete and Malabu Oil and Gas Ltd.

“The said amount was later laundered with several accounts of individuals and different companies, “ EFCC stated.

EFCC said its investigation further revealed that the government was defrauded by SPDC and Malabu Oil and Gas Ltd by underpaying the sum of $210m USD as a signature bonus on OPL 245.

It will be recalled that the EFCC had earlier slammed a nine-count criminal charge against the former AGF and eight others over the oil block scam.

Other defendants in the charge marked FHC/Abj/CR/268/2016, are Etete and an oil mogul, Mr. Abubakar Aliyu.

Six firms- Malabu Oil & Gas Ltd, Rocky Top Resource Ltd, Imperial Union Ltd, Novel Properties & Development Company Ltd, Group Construction Ltd and MegaTech Engineering Ltd, were also joined as defendants in the matter.

The government later filed another three-count criminal charge in which it included Shell, Agip, four Italians, Ralph Wetzels, Casula Roberto, Pujatti Stefeno, Burrafati Sebestiano and ENI SPA, as defendants in the suit marked CR/124/17.