Attorney general of the federation and minister of justice (AGF), Mr. Mohammed Bello Adoke (SAN) yesterday finally broke his silence over the Malabu oil deal, saying he merely facilitated the resolution of a long standing dispute between Malabu Oil & Gas Limited (Malabu) and Shell Nigeria Ultra Deep Limited (SNUD) over the ownership and right to operate Block 245.
LEADERSHIP had on May 24, 2012 exclusively reported a clandestine round-tripping deal among Shell Nigeria, ENI and the federal government over Oil Block 245.
Investigations revealed how the minister in April 2011 brokered the agreement to sell the controversial Oil Block 245 to Shell and paid Malabu Oil and Gas from the proceeds.
Under the structure, Malabu was to surrender OPL 245 to the federal government as if it was revoked. The federal government, on its part, was then to reallocate the oil block to Shell-ENI, collect the money from Shell-ENI and transfer it to Malabu.
Specifically, the agreement between Shell, ENI and the federal government stated, among others, that within five days of the grant and delivery of OPL 245, ENI’s local subsidiary, Agip, will pay the sum of $1,092,040,000 to the federal government on behalf of itself and Shell.
In a press statement signed by Adoke yesterday, he said that due to the misrepresentations and obvious mischief in reporting the role of the federal government, its agencies and officials in the settlement of the dispute, it became necessary to issue a comprehensive response to these allegations so as to set the records straight.
He added that the role played by the federal government, its agencies and officials are in accordance with President Goodluck Jonathan’s commitment to transparency and accountability in governance.
According to Adoke, 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, he explained, executed relevant agreements, including a Joint Operation Agreement in 2001. Besides, records indicated that SNUD took 40 percent participating interests in the venture in a farm-in- agreement and also signed agreement with Malabu as its technical partner for the venture.
He further 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. 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.
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.
It then petitioned the House of Representatives Committee on Petroleum to look into the matter. The House of Representatives Committee on Petroleum found no rational basis for the revocation and reprimanded Shell for its complicity. The committee also directed the federal government to withdraw the re-award, it made to Shell and returned OPL 245 to Malabu, the original allotee of the Block.
Malabu also instituted a suit before a Federal High Court in Abuja which was subsequently struck out, but lodged an appeal against at the Court of Appeal in Abuja.
The AGF added that 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 November 30, 2006, OPL 245 was fully and completely restored to Malabu in consideration for its withdrawal of the appeal.
“Although, several meetings were held between the presidency, ministry of petroleum resources, SNUD and Malabu, to resolve the dispute, no satisfactory outcome was achieved.
“In 2010, when this administration came to power, Malabu again, petitioned the federal government to implement the terms of the out-of-court settlement of November 30, 2006 on the basis of which they had discontinued their appeal.”
Adoke contended that the federal government opted for out of court settlement of all the disputes involved because of the financial implications of defending these actions on the public purse.
But to “accommodate all these interests, a resolution agreement dated April 29, 2011 between the Federal Government of Nigeria and Malabu Oil & Gas Limited was executed wherein the FGN agreed to resolve all the issues with Malabu in respect of Block 245 amicably and Malabu also agreed that in consideration of receiving compensation from the FGN, 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 federal government acting as an obligor, the sum of US$ 1,092,040,000 Billion in full and final settlement of any and all claims, interests or rights relating to or in connection with Block 245 and Malabu agreed to settle and waive any and all claims, interests or rights relating to or in connection with Block 245 and also consented to the re-allocation of Block 245 to Nigerian Agip Exploration Limited (NAE) and Shell Nigeria Exploration and Production Company Limited (SNEPCO).
“It is therefore quite evident from the foregoing that the role played by the federal government, its agencies and officials in relation to Block 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 Block 245.”
While trying to refute allegation of pecuniary interest, Adoke stated that, “at all times, material to the resolution of the dispute, the federal government was not aware of any subsisting third party interest in Malabu’s claim to OPL 245 and neither did any person or company apply to be joined in the negotiations as an interested party.”