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Unending controversy over $1.2bn Malabu Oil deal

LATEST OPL 245 NEWS JANUARY 4, 2020

“Shell and Agip again went into a fraudulent agreement with Malabu Oil and Gas, in which the companies will pay a signature bonus of $210m to the Federal Government of Nigeria, while $1.2b would be paid to the owners of Malabu Oil and Gas Ltd. “Shell Petroleum was later to explain that the payment was for compensation, but an investigation conducted revealed that the money was a bribe to Dan Etete and his cronies.”

ARTICLE

What actually happened to the $1.2billion allegedly paid by Shell and Agip into Federal Government’s Escrow Account with JP Morgan Chase bank sometime in 2011 in relation to the execution of a supposed settlement agreement in respect of the controversial OPL 245 held by Malabu Oil and Gas? Was it a bribe or compensation? The truth could only be known at the conclusion of the charges now pending against former Attorney General of the Federation (AGF), Mohammed Adoke and others. ERIC IKHILAE reports.

Had President Muhammadu Buhari accepted the suggestion by his Minister of Justice and Attorney General of the Federation (AGF), Abubakar Malami, on how he thought was the best way to permanently rest the seeming undying scandal that the Malabu Oil and Gas Limited’s Oil Mining Lease (OML) 254 has become, his (Malami’s) immediate predecessor’s return on December 19, 2019 would have been less dramatic and controversial.

Malami had, in a legal opinion dated September 27, 2017 told the President, among others, that the Economic and Financial Crimes Commission (EFCC) was on a wild goose chase in proposing to prosecute his immediate predecessor, Mohamed Adoke for the last administration’s dealing in relation to what has grown to become the Malabu oil deal scandal.

The AGF’s letter, it was learnt, was in response to a request to that effect from the President, following the renewed interest shown on the case by the EFCC toward the end of 2016.

The Goodluck Jonathan administration, in which Adoke served as the AGF, thought it could foreclose the “restless Malabu Oil spirit, “by executing what Adoke said was “a settlement agreement,”  which saw the Federal Government (in 2011) “warehousing” about $1.1billion “on behalf of some interests, who claimed to have stakes in Malabu Oil and Gas Ltd.”

But, rather than bury the controversy that the Malabu Oil brand has become, the transaction allegedly consummated by Adoke, but purportedly sanctioned by his principal (then President Jonathan) has persisted.

Shortly after the Buhari administration took office in 2015, Adoke sneaked out of the country. But, in early 2017, The EFCC, again, summoned the “Malabu Oil spirit” when it filed two charges, first before the Federal High Court, Abuja  (marked: FHC/ABJ/CR/268/17 )and later, at the High Court of the Federal Capital Territory (FCT) – marked: FCT/HC/CR/124/2017, listing some major players in the 2011 settlement agreement transaction as defendants.

Since charges were filed, no progress was made. Both courts gave orders, but later reversed them on the grounds that the major parties in the charges were not available.

On January 26, 2017, Justice John Tsoho, before whom the charge at the Federal High Court is pending, gave an ex-parte order, directing the Nigerian National petroleum Corporation (NNPC) to take over the management of OPL 245 pending the conclusion of trial in the charge. Few weeks later, the judge reversed the decision and returned to the status quo.

On April 17, 2019, Justice Danlami Senchi of the High Court of the FCT, after listening to EFCC’s lawyer, Aliyu Yusuf, granted the commission’s request for the issuance of an arrest warrant against the defendants for failing to attend court for the purpose of their arraignment. Justice Senchi set aside the arrest warrant in a ruling on October 26, 2019.

Many had thought that the cases would go the usual way of high-profile criminal cases in the country until news filtered in the next month that Adoke had been held in Dubia, The United Arab Emirate (UAE) by the International Police Organisation (INTERPOL).

The brickbats before Adoke’s  reemergence

On learning about the charges, Adoke, sometime in March 2017, petitioned Malami, alleging witch-hunt and demanded that he (his successor) prevail on the EFCC (an agency under the Federal Ministry of Justice) to backtrack.

Adoke said, in the petition: “I believe it is your responsibility to explain to the public who are being sold a fiction that the transaction started from President Olusegun Obasanjo, GCFR under whose administration the Terms of Settlement were brokered with Chief Bayo Ojo, SAN, as the then Attorney General who executed the Terms of Settlement before the tenure of President Goodluck Ebele Jonathan, GCFR who approved the final implementation of the Terms of Settlement and my humble self who executed the resolution agreements,” Mr. Adoke said in the petition dated March 6.

“This is more so as the settlement and its implementation were situated in the Federal Ministry of Justice. It will be recalled that the Terms of Settlement, encapsulating details of the settlement between the Federal Government of Nigeria (FGN) and Malabu Oil & Gas Limited (Malabu), was executed on 30th November 2006.

“The Terms of Settlement, which was later reduced into a consent judgment of the Federal High Court, Abuja, was brokered by our predecessor in office, Chief Bayo Ojo, SAN and signed on behalf of the Federal  Government of Nigeria by the then Honourable Minister of State, for Petroleum Resources, Dr. Edmund Daukoru, during the administration of President Olusegun Obasanjo, GCFR,” Adoke said.

The ex-minister denied any wrongdoing, insisting that he saved Nigeria more than $2 billion in damages that would have stemmed from arbitration claims instituted against the Nigerian government at the International Centre for Settlement of Investment Disputes over the OPL 245 block, which is believed to hold more than nine billion barrels of crude oil and even more volumes of natural gas.

In response, the EFCC stuck to its position that it has a case against Adoke and others listed as defendants in both charges and encouraged them to attend court to clear their names should they feel otherwise.

On September 27, 2017, Malami authored his legal opinion, in which he, among others, advised Buhari to prevail on the EFCC not to pursue the charges already filed against Adoke and others.

Malami said he was able to determine that the EFCC has significant evidence to prove its allegations of sharp practices against prominent players like Bello Adoke, Diezani Alison-Madueke and others.

The letter by Malami, marked: DPPA/FMPR/198/17, had as its heading “Re: Forwarding of case file in respect of charge No. FHC/ABJ/CR/268/17 And FCT/HC/CR/124/2017 Malabu Oil & Gas Ltd.”

Earlier this year, Adoke came up with a book, “Burden of Service: Reminiscences of Nigeria’s Former Attorney-General,” which hit book stalls in Nigeria on September 16, 2019 and in which he continued to tell his side of the story.

The story of the Malabu Oil deal, as told by a reviewer of the book – Dele Agekameh – states  that it began with late Sani Abacha’s “Indigenous Exploration Programme”, which sought the allocation of oil blocks to indigenous companies, which  included the potentially very lucrative OPL 245, which was allocated to Malabu Oil and Gas Limited in 1998 for a concessionary fee of $20 million.

According to Agekameh, the Obasanjo government later issued Malabu Oil and its technical partner, Shell, an Oil Prospecting Licence, OPL, for the oil block, based on a Joint Operating Agreement (JOA) between the two.

He added that Obasanjo, who was Minister for Petroleum in his government, later revoked the licence five weeks after despite assurances given to Malabu Oil and its partner.

“In 2002, Obasanjo’s administration awarded a Production Sharing Contract to Shell for the same oil block for a signature bonus of $210 million. Malabu Oil kicked, dragged the House of Representatives into the matter and went to the courts.

“Obasanjo’s administration was forced to settle and recognise its claim by re-allocating the oil block back to Malabu Oil, despite having signed a new agreement and received $1 million from Shell.

‘That settlement was reduced to a consent judgment of the Federal High Court in 2006. It was then Shell’s turn to raise hell, and it opened investor-state arbitral proceedings against Nigeria in 2009.

“While shopping for technical partners, Malabu Oil approached ENI. ENI was interested in partnering with Shell on the project. Malabu’s refusal to work with Shell, and Shell’s proceedings against the government over its own claim to the oil block created complications that necessitated the government stepping in, according to Adoke, to facilitate some kind of arrangement.

“In the end, Malabu agreed to be paid off with about $1.1 billion for the oil block and the Federal Government agreed to receive the funds on behalf of Malabu Oil in an escrow account controlled by the government.

“The government also received the full signature bonus of $210 million. According to Adoke, the Federal Government and his involvement was limited to facilitating this deal in 2011.

“The deal apparently saved the country from a possible multi-billion-dollar award in Shell’s investor-state arbitration, as well as solved the complication that had been inherited from the previous administrations,” Agekameh wrote.

The EFCC’s case against Adoke, others

The EFCC’s case against the ex-AGF relates to its suspicion that Adoke knew how the $1.1b paid by the two multi-national oil giants, which the Federal Government was made to guarantee, was “distributed among some vested interests.”

In one of the charges, the EFCC’s claim is that Adoke exchanged more than $2.2 million in a bureau de change in Abuja as part of his share of the said $1.1 billion Malabu Oil deal fund. It added that one Abubakar‎ Aliyu, said to be owner of A.A. Oil Ltd, (who is also named in the charge) acted as a middleman for some individuals.

The EFCC said in a court document that Adoke took delivery of exactly $2,267,400 on September 16, 2013, and immediately enlisted the service of money changers to have it converted to the local currency.

It stated: “Sometime on 2nd July 2001, the Federal Government withdrew the title and allocation of OPL 245 to Malabu Oil and Gas Ltd on the directive of Mr. Funso Kupolokun, the then Presidential Adviser on Petroleum to President Olusegun Obansajo after which same was reallocated to Shell Nigeria Ultra Deep Ltd.

“Malabu Oil and Gas Ltd sued the Federal Government over the revocation, but the suit was later withdrawn and settled out of court by the parties and the said oil well was reallocated to Malabu Oil and Gas Ltd.

“Shell and Agip again went into a fraudulent agreement with Malabu Oil and Gas, in which the companies will pay a signature bonus of $210m to the Federal Government of Nigeria, while $1.2b would be paid to the owners of Malabu Oil and Gas Ltd.

“Shell Petroleum was later to explain that the payment was for compensation, but investigation conducted revealed that the money was a bribe to Dan Etete and his cronies.

“Shell was aware at the time of consummating this transaction that Dan Etete, the owner of Malabu Oil and Gas Ltd, was already a convict and hence, was not willing to pay the said sum of $1.2b directly to Dan Etete and or Malabu Oil and Gas Ltd directly.

“One Mohammed Adoke was the Federal Government’s counsel in series of arbitration instituted by Shell in London on the said oil well and, who later became the Attorney General of the Federation, conspired with Shell/Agip to route the payment of the said sum of $1.2b bribe money through Federal Government Escrow Account with JP Morgan Chase bank.

“The said Mohammed Adoke had written a letter ref. No: HAGF/FMPR/2011/Vol. 1/12 dated 9th February 2011 seeking the advice of the Department of Petroleum Resources (DPR) on whether to consummate the transaction involving Shell Ultra Deep Sea, Malabu Oil and Gas Ltd, NNPC, Nigeria Agip Exploration and production Company (SNEPCO).

“The DPR replied in a letter reference No: PILD/880T dated 1st of April 2011 and advised against the transaction on the ground that it was highly prejudicial to the interest of the Federal Government of Nigeria.

“Despite the advice, the then AGF, Mohammed Adoke, approved the payment of the $1.2b bribe money through Federal Government Escrow Account with JP Morgan Chase Bank in London. Sometime in May 2011 Nigeria Agip Exploration and SNEPCO instructed Chase Bank to release $1,092,040,000 into Escrow Account of the Federal Government.

“The 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. Investigation further revealed that the Federal Government was defrauded by SPDC and Malabu Oil and Gas Ltd by under paying $210m as signature bonus on OPL 245.

“Investigation conducted revealed that Malabu Oil and Gas Ltd and SPDC secured OPL245 through fraudulent scheme involving high scale bribery and corruption by top management of the company.

“Information available to the applicant (EFCC) is to the effect that a London judge, sitting in the Southwark Crown Court refused to release to Dan Etete and Malabu Oil and Gas Ltd $85m which is connected to the said fraudulent transaction by Shell Nigeria, Nigeria Agip Exploration and Malabu Oil and Gas in respect of OPL245.

“The $85m formed part of the proceeds of the fraudulent transaction between Shell Nigeria, Nigeria Agip Exploration and Malabu Oil and Gas Ltd. The said sum was seized as a result of request by Italian prosecutors,” EFCC said.

Was the Abacha family outsmarted?

Unknown to many, the investigation by the EFCC was partly ignited by a petition from the family of the late General Sani Abacha, who it turned out, was part of the Malabu Oil episode from inception.

The late Abacha’s surviving eldest son, Mohammed Abacha, claimed in court documents obtained by The Nation, that he was a pioneer director in Malabu Oil and Gas Ltd, but was allegedly outsmarted by former Petroleum Minister, Dan Etete, who he claimed was engaged, from inception, as a consultant for the Malabu Oil and Gas project.

Mohammed said while he was imprisoned between 1999 and 2002, and could not actively participate in the affairs of Malabu Oil, “Chief Dan Etete (also known as Chief Dauzia Loya Etete, the consultant to the 1st plaintiff (Malabu Oil) whose function is in an advisory capacity, took over the 1st plaintiff’s books, documents and records in the absence of the 2nd plaintiff (Mohammed) without any mandate to do so.

He stated that sometime in 2010, they learnt of some fraudulent alterations of the shareholding structure of Malabu Oil in its files with the CAC, purporting to divest the three original shareholders of their investments in Malabu Oil and allegedly making Seidougha and Joseph the only shareholders and directors with 10million shares each.

“Sometime in April 2011, SNUD, SNEPCO and NAE entered into a negotiation and allegedly bought over the assets of the 1st plaintiff – OPL 245 through Seidoougha and Joseph, with Chief Dan Etete acting as the two directors and consultant of the 1st plaintiff, for a consideration of about $1.3b with the Federal Republic of Nigeria acting as an obligor.

“The said transaction was carried out through a series of agreements signed and dated between 29th and 30th April 2011 by Seidougha Munamuna purportedly acting as a director of the 1st plaintiff and Mr. Rasky Gbinijie purportedly acting as Company Secretary of 1st plaintiff, with the 5th, 6th and 7th defendants – Shell, Agip and FGN,” he said.

Mohammed added that the complaints by Malabu’s actual directors about “the illegality of the transaction leading to the sale of OPL 245, Shell and Agip “requested the involvement of the FGN as a form of guarantee and security for the investment they seek to engage in.

“Following the execution of the several agreements, $1,092,000,000.00 was paid into a Federal Republic of Nigeria Domiciliary Escrow Account No: 41454193 domiciled in JP Morgan Chase Co., London to be passed to the 1st plaintiff as consideration for the alleged surrender of its asset – OPL 245.

“On 16th August 2011, the FGN through the then Minister of State for Finance, Dr. Yerima Lawan Ngama, and the AGF, Mohammed Bello Adoke (SAN) instructed the release of the money from the said Domiciliary Escrow Account of the FGN in the following manner: $401,540,000 paid into account No: 2018288005 purportedly belonging to the 1st plaintiff in Fisrt Bank of Nigeria Plc, and $400,000,000 paid into supposed 1st plaintiff’s account No: 3610042472 with Keystone bank Plc.

“Out of the $1,092,000,000.00, the sum of $801,540,000 was paid into the 1st plaintiff’s account with Fist Bank of Nigeria Plcand Keystone Bank Plc allegedly opened and run by the 1st plaintiff, yet Chief Dauzia Loya Etete (aka Chief Dan Etete) is the sole signatory to the two accounts,” Mohamed said.

The suit filed by Malabu Oil and Gas, Mohammed, Pecos Energy Limited (promoted by Otunba Oyewole Fasawe) in which they are challenging the alteration in Malabu Oil’s shareholding structure, is now pending before Justice Binta Nyako of the Federal High Court, Abuja.

SOURCE

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