Shell, Eni in fresh trouble as Nigeria begins moves to withdraw OPL 245

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.
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.