EXCLUSIVE: Shell, Eni in fresh trouble as Nigeria begins moves to withdraw OPL 245 from Malabu, Dan Etete

The Nigerian government is set to retrieve one of Africa’s richest
oil blocs from oil giants, Shell and Eni, PREMIUM TIMES has learnt.
Not only will the two oil giants lose OPL 245, should President
Muhammadu Buhari approve the recommendations, they will also
be fined billions of dollars for illegal activities, including paying
money to fraudulent public officials and private citizens in order to
secure the bloc.
The retrieval of the controversial oil bloc, estimated to contain
about 9 billion barrels of crude, as well as placing heavy fines on
the oil giants, is contained in a far-reaching recommendation by
the office of the Director of Public Prosecution, DPP, Mohammed
Diri.
The recommendation was at the instance of the Attorney General
of the Federation and Minister of Justice, Abubakar Malami, who is
set to advise the federal government on how to proceed on a
controversial deal that is being investigated by authorities in four
different countries.
In arriving at its recommendations, the DPP committee, which
included lawyers from his office, called for the cancellation of the
‘settlement agreement’ that ceded the oil bloc to Shell and Eni.
Summary of OPL 245 history. Source: Global Witness
The ‘Settlement Agreement’
Made on April 29, 2011, the settlement deal is made up of three
different ‘Resolution agreement’ signed by the parties involved in
the OPL 245 saga.
The first, titled “BLOCK 245 MALABU RESOLUTION AGREEMENT”
was signed between representatives of the federal government
and those of Malabu, which was represented during the
discussions by a former petroleum minister, Dan Etete.
The second agreement, titled “BLOCK 245 RESOLUTION
AGREEMENT” was between the Nigerian government and officials
of Shell and Eni/AGIP; while the third agreement, titled “BLOCK 245
SNUD RESOLUTION AGREEMENT”, was signed by officials of the
Nigerian government and Shell.
The immediate past attorney general of the federation,
Mohammed Adoke, and immediate past petroleum minister,
Diezani Alison-Madueke signed all the agreements on behalf of the
federal government. Both are among officials being investigated
by Nigeria’s foremost anti-graft agency, the Economic and
Financial Crimes Commission, for their roles in the scam.
The agreements saw the transfer of OPL 245, first from the
Malabu to the Nigerian government and then from the
government to Shell and Eni. The agreements also effectively
cancelled all previous law suits and judgements related to the
case.
It was based on these agreements that Shell and Eni paid a total of
$1.3 billion into Nigerian government accounts, which as stated in
earlier reports by PREMIUM TIMES, largely ended up in accounts of
phoney companies and shady characters.
Cancel the agreement
The committee empanelled by the Attorney General Malami
recommended that the agreement be cancelled, describing it as
“null and void”, and saying it “should not be given any legal effect
by the FGN (Federal Government of Nigeria) as doing so would
amount to the FGN condoning and perpetuating illegality.”
One of the reasons the panel consider the agreement illegal is that
the ex-convict, Mr. Etete, had no legal authority to negotiate the
agreement on behalf of Malabu as he was not a shareholder of the
company nor had the permission of the shareholders to do so.
Also, the oil bloc was awarded to Malabu in furtherance of
Nigeria’s policy to encourage local companies and part of the
conditions for the award was that “foreign participation interest in
the blocks (OPL 245 and 214) shall not exceed 40%, i.e. 60/40
indigenous to foreign;” a fact Shell was aware of but chose to
ignore.
The committee also sought the cancellation of the agreement
based on a resolution by the last House of Representatives, which
called for the cancellation and demanded that Shell be“censured or
reprimanded… for its lack of transparency and full disclosure in its
bid to acquire OPL 245.”
Also, although Shell and Eni claimed they only struck an
agreement with the federal government and that they did not
know, before the agreement, that the money they paid was going
to Malabu, evidence by investigators in Italy and the Nigerian anti-
graft agency, EFCC, shows that the oil firms knew the payment
was eventually going to Malabu accounts controlled by Mr. Etete, a
man once convicted for money laundering in France.
Apart from calling for the cancellation of the agreement, the DPP
panel also recommended the full recovery of the money paid by
Shell and Eni, describing it as “proceed of crime.”
PREMIUM TIMES had reported how the Federal Government paid
over $800 million of the money into accounts controlled by Mr.
Etete and how Justice Edis of the Southwark Crown Court in
England refused to release $85 million of the remaining sum to
Mr. Etete in December.
In refusing the to release the money, the judge questioned the
actions of the Goodluck Jonathan presidency on the OPL 245 saga
saying “I cannot simply assume that the FGN which was in power
in 2011 and subsequently until 2015 rigorously defended the public
interest of the people of Nigeria in all respects.”
Apart from recommending the withdrawal of the OPL 245 from
Shell and Eni and calling for the retrieval of the money, the panel
also asked the federal government to collaborate with all foreign
agencies investigating the deal as well as prosecute all individuals
and firms that violated local and international laws in the process.
In its recommendation, the panel also stated that the Federal
Government can make “close to $10 billion” from the scandal.
Making money for Nigeria
To make the money, the panel recommended that Shell and Eni
be fined at least $6.5 billion (five times the $1.3 billion Shell and Eni
originally paid in 2011 the block).
This, the panel stated, should be done “in accordance with the
relevant provisions of our laws in conformity with international
best practices via the appropriate courts (at) home or abroad as
the case may be.”
In other words, from the fine and the amount to be retrieved of
the $1.3 billion, the government could make about $8 billion.
Also, in asking that the oil bloc be returned to Malabu’s original
owners, the panel asked that the necessary licensing fees, transfer
fees, signature bonus, and tax be paid by the firm; while 50 per
cent of the rights to the bloc should return to Nigeria after three
years based on original intent of awarding the bloc.
PREMIUM TIMES had reported how Malabu was awarded the oil
block in 1998 with its shareholders being Mohammed Abacha,
son of late military dictator, Sani Abacha, (50 per cent); Kweku
Amafegha (the fictional character created by Mr. Etete, 30 per cent);
and Wabi Hassan (wife of Hassan Adamu, former Nigerian
ambassador to the U.S. 20%).
Human rights lawyer, Jiti Ogunye, had argued that the oil bloc
ought to return to Nigeria and Malabu’s registration cancelled since
it was based on falsehood.
“Section 190 and Section 436 (b) of the Criminal Code Act is
applicable to the conduct of the promoter of Malabu, in that a false
representation or declaration was made to induce the Corporate
Affairs Commission to issue an incorporation certificate,” Mr.
Ogunye said.
“Owing to the false representation, the Corporate Affairs
Commission can approach the Federal High Court under Section
563 of CAMA to seek the withdrawal and cancellation of the
Certificate of Incorporation of Malabu.”
Awaiting Malami, Buhari
The DPP report was to be sent to the Attorney General last week,
a source at his office told PREMIUM TIMES, but was delayed due to
Mr. Malami’s trip with President Muhammadu Buhari to the United
Arab Emirates.
The report is to be sent this week to both the Solicitor General of
the Federation, Taiwo Abidogun, and Mr. Malami, with the latter
expected to advise President Buhari on the next steps based on the
recommendations.
A source at the presidency told PREMIUM TIMES that the president
was keenly following the matter and recently received a report on
it from the office of the Vice President, who is coordinating the
actions of the AGF, EFCC and Petroleum ministry on the matter.
Both the DPP and the Attorney General, in separate phone
interviews, confirmed their offices were working on resolving the
OPL 245 issue, but would not comment on the details.
“Malabu is a very sensitive issue and if there’s any resolution, I will
have to get clearance before I can speak to the press on it,” the
DPP, Mr. Diri, said.
Also, PREMIUM TIMES learnt that Shell was already aware of the
government’s moves to cancel the agreement, and was lobbying
against it.
However, the oil giant’s spokesperson, Precious Okolobo, declined
comments on the matter.

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