Royal Dutch Shell Plc  .com Rotating Header Image Shell Sues Govt Over Oil Licence

Chika Amanze-Nwachukwu, This Day (Nigeria)
Published: Jun 15, 2007

Dissatisfied with the Federal Government’s decision to return the disputed Oil Prospecting Licence (OPL 245), to Malabu Oil and Gas, a company owned by erstwhile Minister for Petroleum Resources, Chief Dan Etete, Shell Nigeria Exploration and Production Company (SNEPCO), has approached a Federal High Court to set aside the settlement terms between government and the company (Malabu).

This is coming as Texaco Petroleum Company was said to have indicated interest in the oil block.

Confirming the court action in a telephone interview yesterday, Mr Tony Okonedo, Communications Manager of SNEPCO, said the company was not a party to the terms of the settlement, which culminated in the return of the block to Etete’s company.

“We are aware of the terms of settlement and purported re-allocation of the oil block to Malabu Oil and Gas. We are not a party to it and have challenged it in court. We will not offer further details now for reasons of commercial confidentiality and since the matter is in court, it will amount to subjudice,” Okonedo said.

However, THISDAY checks revealed that the former minister welcomed Texaco’s interest in the block, and has had series of meetings with the company’s management on how to seal the deal.

Licence for the oil block, which was obtained by the company in 1998 when Etete was minister, was revoked in July 2001, over failure to fully pay the required signature bonus.

Government’s decision to re-award it to Shell, which was Malabu’s technical partner, resulted in series of controversies and litigations, which lasted for several years.

Government was said to have in December last year, resolved to settle the dispute out of court, consequent upon which the block was recently returned to Malabu, after it accepted to pay the sum of $210 million signature bonus posted by Shell.

Former Attorney-General of the Federation (AGF) and Minister for Justice, Chief Bayo Ojo, SAN, and Minister for Energy, Dr Edmund Daukoru, had in various correspondences, asserted restoration of the acreage to Malabu, and advised Shell to stop laying further claim to it.

The terms of settlement agreement signed by the company (Malabu) and the Federal Government, which Shell is currently challenging, restored the block “wholesale and completely,” to Etete’s company, subject to its payment of the $210 million signature bonus.

Distributed by AllAfrica Global Media. ( and its sister websites,,,,, and are all owned by John Donovan. There is also a Wikipedia article.

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