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Home 5 AFRICA 5 NEWS 5 $1.09 billion Malabu oil deal: Reps, Adoke in war of words

$1.09 billion Malabu oil deal: Reps, Adoke in war of words

Members of the House of Representatives and the Attorney-General of the Federation and Minister of Justice Mr. Mohammed Adoke, on Friday exchanged hot words over the controversial transfer of an oil well, OPL 245, to Shell/Agip Nigeria Limited by the Federal Government in 2011.

The lucrative oil well was originally allocated to Malabu Oil and Gas Limited, an indigenous firm incorporated in 1998.

But, in a deal facilitated by the FG, the two multi-national oil firms paid off Malabu and effectively took over control of 100 per cent holding of OPL 245.

A former Minister of Petroleum Resources, Chief Dan Etete, was a major stakeholder in Malabu Oil and Gas Ltd.

The House had empanelled an ad hoc committee to investigate the transaction over suspicions that the exercise breached extant offshore exploration policy of encouraging indigenous participation in the oil industry.

There were allegations that it was Adoke and the Minister of State for Finance, Mr. Mohammed Ngama, who authorised the payment of funds from FG account to seal the deal.

However, as Adoke appeared before the panel headed by Mr. Leo Ogor on Friday, facts emerged that Mohammed, son of the late Head of State, Gen. Sani Abacha, had also laid claim to 70 per cent equity holding in Malabu Oil and Gas.

Adoke, who denied authorising any payment in connection with the deal, told the committee that the FG merely played an intervention role in a bid to resolve a long-standing dispute between Malabu, its technical partners, SNUD, and other interests laying claim to the oil well.

He explained that for over 12 years, the dispute had incurred several court litigations, revocation and re-allocation of OPL 245 before the $1.09bn deal was struck, an outcome of the agreement entered into by the parties.

But, as members fired a barrage of questions at Adoke, probing into his alleged role in the deal, the AGF flared up, saying that he was not a “crook and will never support crooks.”

He took exception to the line of questioning by a particular lawmaker, Mr. John Dyegh.

Adoke replied, “I know where that question is coming from. I am not a crook and I will never support crooks.

“I am being maligned by people who are the architects of the ruins of this country.”

It turned out at the hearing that the Abachas, through their consultants, had petitioned the government over the OPL 245 deal, accusing Etete of allegedly “forging” names of members of the board of Malabu to sideline Mohammed in the $1.09bn deal with Shell/Agip.

But, according to the AGF, who described the Abachas as “latter day claimants,” their petition reportedly came after the deal had been finalised and became “irreversible.”

“This Malabu deal was on for 12 years; in all those years, nobody came up with a petition,” he stated.

He admitted meeting with the representatives of the Abachas when they came up with their petition, but he said he advised them to resolve whatever differences there might be internally within Malabu, as the transaction could no longer be reversed.

Adoke spoke more on how the FG got involved in the transaction, “To resolve all the contending claims in a satisfactory and holistic manner, due regard was given to the terms of settlement of Nov. 30, 2006, which had been reduced to orders of the court, the underlying policy of encouraging the participation of indigenous oil and gas companies in the upstream sector of the oil industry and the fact that Shell had substantially de-risked Bloc 245.

“To accommodate all these interests, a Resolution Agreement dated April 29, 2011 was executed wherein the FGN agreed to resolve all the issues with Malabu in respect of Bloc 245 amicably and Malabu also agreed that it would settle and waive any and all claims to any interest in OPL 245.

“In furtherance of the Resolution Agreement, SNUD and ENI agreed to pay Malabu through the FG acting as an obligor, the sum of US$ 1,092,040,000bn in full and final settlement of any and all claims, interests or rights relating to or in connection with Bloc 245 and Malabu agreed to settle and waive any and all claims, interests or rights relating to or in connection with Bloc 245 and also consented to the re-allocation of Bloc 245 to Nigerian Agip Exploration Limited and Shell Nigeria Exploration and Production Company Limited.

“It is, therefore, quite evident from the foregoing that the role played by the FG, its agencies and officials in relation to Bloc 245 was essentially that of facilitator of the resolution of a long standing dispute between Malabu and SNUD over the ownership and right to operate Bloc 245.”

However, the committee noted that the transaction, no matter how well-intentioned, breached the existing legal framework in the country in which a foreign oil firm cannot hold more than 40 per cent share of any of oil well.

Members observed that the deal simply handed over 100 per cent of the control of OPL 245 to Shell and Agip, sharing 50 per cent apiece.

Commenting further, Ogor said, “We will not sit here to allow two oil majors to share our lucrative Bloc 245; we will never allow it.

“We will look at the draft of that agreement; we will re-draft it because we have a duty to protect our indigenous policy of participation in the oil and gas industry.

“It has never happened before that oil majors got more than 40 per cent share in any oil bloc.”

But, another member of the committee, Mr. Victor Ogene, stated that a key issue that must not be lost to Nigerians was how a “sitting minister (Etete) and the son of a sitting head of state (Abacha)” were allocated an oil bloc in the first place.

The Economic and Financial Crimes Commission is conducting a separate investigation into the deal.

Ogor said on Friday that the panel would await the outcome of the EFCC investigation to assist the lawmakers in establishing what went wrong.

via Punch

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