Jonathan, Etete, Shell in fresh N155billion scandal

President Goodluck Jonathan
Former President Goodluck Jonathan's

By Idris Akinbajo

Four years after he was convicted of money laundering in France, Dan Etete, a former Petroleum Minister, through his company Malabu Oil, has become a billion dollars richer, courtesy of the Nigerian Government and Shell.

According to documents (filed March 22, 2012) before the Supreme Court of the State of New York in the US, President Goodluck Jonathan discreetly approved the transfer of the sum of $1.1bn to Mr. Etete on April 29, 2011, two weeks after he was re-elected.

The money was first paid to the Federal Government by two multinational oil companies: Nigeria Agip Exploration Limited (Agip) and Shell Nigeria Exploration and Production Company Limited (Shell) in respect of oil block OPL 245.

But shortly after the funds were credited to the Federal Government’s account, Mr. Jonathan ordered that it should be secretly transferred to a London account of Mr. Etete’s company, Malabu Oil.

It is not clear what deal Mr. Jonathan struck with Malabu, and on what basis the payment was made. President Jonathan’s spokesperson, Reuben Abati did not answer or return calls seeking his comment for this story. He also did not respond to a text message sent to him for the same purpose.

The government made the payment to Mr. Etete’s company even when it had repeatedly insisted that the award of the oil block to Malabu was done in violation of laid down procedures.

Shell insisted it had no knowledge that the government passed the funds to Mr. Etete’s company.

OPL 245: History

While serving as Petroleum Minister under late Head of State, Sani Abacha, Mr. Etete awarded his own company, Malabu, an oil block, OPL 245 in 1998.

The allocation was however reversed by the Federal Government under President Olusegun Obasanjo in 2001 when the FG described the allocation process as dubious. The block was allocated to Shell in 2002.

Following the revocation, a prolonged legal battle ensued with Malabu taking the Federal Government to court. In 2006, the Federal Government reversed itself and re-allocated the oil block to Malabu. This angered Shell which then filed arbitration proceedings in Washington.

Following the protracted legal battles, an agreement was reached between all parties.

The agreement

In an agreement titled “Block 245, Malabu resolution agreement” dated April 29, 2011 between Malabu and the Federal Government, the FG agreed to pay Malabu $1,092,040,000 in “full and final settlement of all its claims, interests or rights relating to OPL245.” The agreement also stated that the rights to the oil block would be reallocated to Agip and Shell.

In a separate agreement between Shell and Nigeria, titled “Block 245 resolution agreement,” the two multinationals (Agip and Shell) agreed to Pay the same sum “for the purposes of FGN settling all and any existing claims and/or issues over Block 245…”

In other words, the multinational oil firms agreed to pay $1.1bn to the FGN with the knowledge that the money would be used to settle any existing claims that existed by any other party to the oil block.

We didn’t pay to Etete

Despite knowing that the money was to be paid as settlement to a third party and knowing that Malabu was the only company with bragging rights over the oil block, Shell claims it did not know the money was to be paid to Mr. Etete’s Malabu.

“Shell was not aware that that money was to be paid to Malabu,” said Precious Okolobo, a communications officer with the oil company in a telephone interview.

Mr. Okolobo confirmed in a follow-up email that the “the Federal Government of Nigeria has allocated the deepwater offshore block OPL 245 jointly to Nigeria Agip Exploration (NAE) and Shell Nigeria Exploration and Production Company (SNEPCo),” and that “each now holds 50 percent in OPL 245, with NAE as operator of the block.”

“Any payments relating to the issuance of the license were made only to the Federal Government of Nigeria,” the Shell official said saying “in line with Shell’s information policy, we cannot reveal commercially sensitive information, and hence cannot comment further on the papers filed in the New York court proceedings.”

The American court case

Mr. Etete ‘s company is being sued in the United States for alleged refusal to honour an agreement with ILC, a company registered in the British Virgin Islands. The company claims it helped negotiate the agreement Malabu had with the FG and was thus entitled to payment under “an engagement letter and fee agreement” it signed with Malabu on January 19, 2010.

“ILC contends that it fully performed its obligations under the fee agreement entitling it to a 6 per cent success fee amounting to $65,522,400 and that Malabu has indicated that it will not pay this amount,” the company told the court.

Another company allegedly owed by Malabu over OPL 245 had also sued the company in the UK which led to a court freeze of some accounts linked to the company and also to Nigeria.

The Federal Government, through the Attorney General of the Federation, Mohammed Adoke had objected to the freezing of its account in a letter dated July 16, 2011 to the court saying “the FGN does not submit to the jurisdiction of the English courts and that this letter is sent only to claim immunity.

A history of corruption

Mr. Etete, who served as minister between 1995 and 1998, was convicted of money laundering in France in 2007. He was sentenced to three years in prison and given a fined $300,000. He was also asked to pay $150,000 to the Nigerian Government.

The former Minister appealed the ruling. In March 2009 however, a French appeal court confirmed the money laundering charges against Mr. Etete, and fined him $10.5 million after conviction.

Apart from money laundering and his controversial roles in oil block dealings, Mr. Etete is also believed to be a major beneficiary of the Halliburton bribe where $180 million dollars was paid as bribe to senior government officials by a consortium including a subsidiary of an American company, Halliburton.

Mr. Etete was an ally and business associate of Jeffery Tesler, the British middleman who coordinated the bribe scheme and who was recently convicted in the United States for his role in the bribe payment.

Neither Mr. Etete nor any other Nigerian has been convicted for the collection of the bribes; though the companies that made the payment and the middlemen have all been convicted or indicted in the United States and other host countries.

 


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  • Sule

    What a shame! What a shame!! What a shame!!!

    • Ahmed2001

      This is bad journalism. The President and indeed the Federal Government is only honouring the Agreement it had with Malabu. GEJ did not allocate the oil block. He did not revoke it either. The Government was already sued before the Agreement was reached. Shell and Agip agreed to pay while the Government agreed to settle Malabu. I don’t like journalism that tend to attack persons instead of.the issues. The caption is mieading and the contents.contradicting. Journalists shd pls sit up. Nigerians do not need this kind of journalism. What is wrong abt the payment if they reached agreement with the Federal Government? Whenever they say Federal Government, journalists and Nigerians shd not think it means Goodluck Jonathan. It means officials of the government. It could be a director in a ministry, a Minister or even some representatives from different ministries and agencies. Also, the President can only sign to authenticate payments if the law demands that the President must sign before such and such payment can be effected. It doesn’t mean that he asked that so and so person be paid. Some of our journalists are just half-baked. Bad journalism is nauseating.

  • Abdumaleeqbee

    I pity NGR and common man are crying of hunger,they’re busy mismanaging our money,hard earn money and tax payer money. What a PITY.

  • Manu

    Nigeria is in a total mess, problems here & there, its just unfortunate that only nuisance & corrupt people of the society who get into political offices now, while men & women of integrity are totally left by the side

  • Amazed

    This Jo’man is the most corrupt element that has ever ruled Nigeria. His case is worsened by his lack inferiority complex and lack of intelligence. Massive corruption is going on right inside his nose

  • Elshamaki

    we appreciate this forum.Please keep exposing these unscrupulous,corrupt and ill-minded rulers,whom doesn’t know human value. May the wrath of God catch up with them!!!

  • Olujacob

    It is clear that it’s all a country which do not look at issues, if we do such a case should be trashed. But I believed the case is in favour of the third party which happen to be MALABU CO. it’s a pitty that same person used is person to give out the block.President should try to be careful the world is watching him and he is risking the life of many. I such case should treated with fairness by letting poeple being rule know, how can a company be paid such an amount outside Nigeria and keep saying we are poor or the masses has no job, it has to be because all the so called quality money in the country always going outside this need to be stop.I love Nigeria but the mind set is bad, we need to start changing it now or else things will be difficult more.May we be safe from the hand of the Jegudugeras.
    Olujacob Adex May,2012

  • Ijendu Iheaka

    Even though we know Nigeria’s leadership at all times in the recent past had recorded some kind of monumental corrupt practices, I do not see anything implicating the present Federal Government and President Jonathan in this piece of writing. All I see is an uncoordinated journalist trying so hard to make a fuss of what he alone seems to know that was not contained in his story. He did not tell us if Nigeria was sued also by the party that brokered the settlement which originated the suit. Even if we assume that from the court’s freezing of Nigeria’s bank account, it is not clear why a court should do so when Nigeria had played its role in an existing agreement and is not the party refusing to pay. So why was Nigeria and GEJ dragged into this? This is bad journalism.

  • Ijendu Iheaka

    I am also asking Supposing GEJ’s hands were tied by an existing arrangement which Obsanajo’s government that revoked and regrettably restored the allocated oil block to Etete had made before he (GEJ) took office? Again there is a question needing to be answered here and it is ” does Etete’s later conviction in France of ”money laundering” nullify and render void the business transactions and services his company had rendered to this nation prior to the conviction for which the company should be paid for or does such conviction only rightly cast aspersions on the person of Etete? To my mind the blame on this transaction falls rightly on the government (Abacha’s)that allocated the oil block to Etete illegally and the one (Obasanjo’s) that could not use its sovereign powers to sustain the revocation. Journalists, please, Let us report sensibly so that people would not think Journalists could be bought one for a penny by teflon paymasters. God bless all Nigerians and keep us all to see the day when Truth shall set both our leaders and the followers free. The day that will bring a new dawn for us and our children.

  • Teddy Allanah

    Sad for Nigeria.

    How can some Lame Ducks forced them selves on over two hundred and fifty million People.

    The Peoples’ Democratic?Party is a criminal Organization existing in Nigeria,claiming to be a Political Party.with rigging instruments:Independent? National Election Commission,(2)The Judiciary.

    Nigeria, should rise up and reclaim their stance.

    Teddy Allanah
    21 Silver Lane,
    Unit B 5
    East Hartford
    Connecticut
    06118
    USA
    Skype:princetallanah
    http://www.tmiwireless.com/?aid=5927

  • Teddy Allanah

    In response to Ahmed 2001,

    Why did the Nigeria President ordered,that this huge amount of money be transfered to specific bank accounts?if he have no secret Agenda

  • Mahdi mohammed

    Ahmed2001, I can’t understand why pple like you could not see beyond your noses? Over the years Federal Govt top officials had been colluding with those white bastards to siphone money to personal accounts. That hsa been the tradition, and you coming that low to defend what you don’t even know is sad and pathetic. You will be sitting down “lame ducked” watching while the North gets poorer by the day and the South gets richer by the day because of deceit and sharp practices.
    Another thing was the way and manner the largesse was distributed to pple that had no stake in Malabu should steer your curiosity that fraud was involved.

  • olumide

    Some people Α̲̅я̩̥̊ε̲̣̣̣̥ ₪o† detailed @ all before jumping into conclusion. Pls read T̶̲̥̅̊h̶̲̥̅̊e̶̲̥̅̊ full story T̶̲̥̅Ơ̴͡ T̶̲̥̅̊h̶̲̥̅̊e̶̲̥̅̊ end before Ɣøû start abusing GEJ.

  • 1116141

    Before you start talking about GEJ read the article well. GEJ was acting based on court orders. but the main person who caused the whole problem is OBASANJO becaused coming from prison he wanted to start taking charge of the oil sector thus leading to this legal battle. So the main Actor to be blamed here is Obasanjo.