FG Explains Role In $1.1 billion Malabu Oil Scandal

The Federal Government on Sunday responded to a scandal allegedly involving President Goodluck Jonathan, two ministers, a former minister of petroleum and two multinational oil firms. The response, which came in the form of a statement issued by the Minister of Justice and Attorney-General of the Federation, Mr. Mohammed Adoke (SAN), came almost a week after the scandal had first broken.

However, the statement was silent on the claim in the report that the transaction was facilitated by President Jonathan and senior government officials who might have benefitted from the deal.

Global Witness, an international non-governmental organisation that promotes the protection of human rights and the sustainability of natural resources, had alleged in a report that the Federal Government round-tripped a sum of $1.092bn for oil block OPL 245.

The report entitled, “Shell’s obscure payments kill its case for weak US and EU transparency laws”, alleges Nigerian subsidiaries of both Shell and ENI paid $1.092bn (N155bn) to the Federal Government for OPL 245. It further says that senior government officials, at the behest of President Jonathan, then paid the entire N155bn to Malabu Oil and Gas, a company owned by Mr. Dan Etete, a former oil minister under the late General Sani Abacha.

An online medium, PREMIUM TIMES, last week, had stated that the money was later shared among government officials and some private individuals.

But Adoke, in the statement, said the allegation was without basis, adding that the government only paid the role of a “mere facilitator of an amicable settlement between two disputing parties over a long standing dispute with obvious economic implications for the country.” He described reports to the contrary as ““misrepresentations and obvious mischief in reporting the role.”

After its efforts to get government officials to speak on the matter proved abortive, The PUNCH, on Friday, had reported that government was unwilling to comment on the matter.

But Adoke, in the statement, argued that the Federal Government and its agencies should not be dragged into a purely commercial dispute.

According to him, Malabu and other indigenous oil and gas companies were allocated oil blocks which they were expected to develop in partnership with international oil companies as technical partners.

He further explained, “Malabu was allocated OPL 245 in April, 1998 and in accordance with the terms of the grant, it appointed SNUD as its Technical Partner.

“The two companies executed relevant agreements including a joint operation agreement in 2001. Records indicate that Shell Nigeria Ultra Deep Limited took 40 per cent participating interests in the venture in a farm-in- agreement and also signed agreement with Malabu as its technical partner for the venture.”

He stated that although Malabu was issued a licence for Block 245 in April 2001, the same licence was subsequently revoked by the Federal Government on July 2, 2001.

Adoke said that Exxon-Mobil and Shell were invited in April 2002 to bid for OPL 245 despite subsisting contractual agreements between Malabu and SNUD with respect to OPL 245.

The minister said, “Malabu was dissatisfied with the revocation and contended that the circumstances leading to the revocation of its licence on Block 245 was less than transparent and smacked of inducement and connivance from SNUD, its technical partner.

“Malabu also contended that the subsequent re-award of OPL 245 to SNUD by the Federal Government was done under questionable circumstances. It then petitioned the House of Representatives Committee on Petroleum to look into the matter.”

He noted that the House of Representatives Committee on Petroleum had found no rational basis for the revocation, reprimanded Shell for its complicity and directed the Federal Government to restore OPL 245 to Malabu, the original allotee.

The minister disclosed, “Malabu also instituted Suit No. FHC/ABJ/CS/420/2003, before the Federal High Court (FHC), Abuja to enforce its claim to OPL 245. Although the suit was struck out by the FHC, Malabu lodged Appeal No. CA/A/99M/2006 before the Court of Appeal, Abuja, Division.

“During the pendency of the Appeal, an amicable settlement was entered into between Malabu and the Federal Government and in compliance with the terms of settlement executed by the Parties on the 30th of November 2006, OPL 245 was fully and completely restored to Malabu in consideration of its withdrawal of the Appeal.”