Malabu fraud: Why Nigerian Government retrieved OPL 245 from Shell, Eni

adoke-and-etete

Nineteen years after it was first awarded to a controversial firm, OPL 245 has reverted back to the federal government.

The block, considered the richest in Africa, is estimated to contain over 9 billion barrels of crude and even larger volume of gas reserves.

For comparison, at Nigeria’s current OPEC oil output quota of 2.2 million barrels per day, OPL 245 alone can provide all Nigeria’s oil production needs for over 11 years.

Formed on April 20, 1998, Malabu was awarded the block 9 days later by the Sani Abacha government, PREMIUM TIMES investigations revealed.

For the next 12 years the oil block would change hands between Malabu, oil giant Shell and the Nigerian government as all parties schemed for control. That disagreement started in 2001 when the Nigeria government first cancelled the award of the block to Malabu and gave it to Shell, investigations showed. The government would later revoke the allocation from Shell.Infographic---Malabu

In 2010, President Goodluck Jonathan appeared to resolve the controversy when he directed that the block be given to Malabu.

Having done several technical works on the block and realising how rich it was, Shell would not let go and was willing to play ball. Along with Italian oil giant Eni, the Anglo-Dutch firm paid $1.097 billion into a Nigerian government account in 2011 for the block.

Over 70 per cent of the payment ($801 million) was controversially transferred to Dan Etete, the man who as petroleum minister in 1998 first awarded the block to Malabu. Mr. Etete would later transfer more than half of this sum into accounts of phoney companies controlled by Aliyu Abubakar, a man believed to have acted as a front for politically exposed persons including Mr. Jonathan and his attorney general, Mohammed Adoke, as well as Shell and Eni staff.

The way the money paid by the oil giants was laundered would later lead to investigations in at least five countries culminating in various corruption charges.

REASONS FOR REVERSAL

In asking the Federal High Court to order that the oil block revert to the federal government, the anti-graft EFCC narrated its investigations.

An EFCC operative, Ibrahim Ahmed, told the court in an affidavit that the agency commenced investigations in 2012 after it received a petition “from shareholders of Malabu Oil and Gas alleging conspiracy to commit fraud, forgery of board resolutions to alter share structure of the company.”

PREMIUM TIMES had reported how at inception, Malabu was owned by Mohammed Sani (son of late dictator Sani Abacha, 50 per cent), Kwekwu Amafegha (fictional character created by Mr. Etete, 30 per cent) and Hassan Hindu (wife to Nigeria’s then Ambassador to the U.S., Hassan Adamu, 20 per cent).

EFCC investigations would later confirm this to be true.

Summary of Malabu's history
Summary of Malabu’s history

Mr. Etete, who owned 30 per cent of Malabu at inception connived with a self-appointed company secretary, Rasky Gbinigie, to falsify board resolutions in order to take control of the oil block. It was his claim of sole ownership that led him into negotiating deals on behalf of the company leading to the $1.1 billion paid by Shell and Eni.

However, the fraudulent manipulation of Malabu share holdings was not the only reason for the EFCC’s demand before the high court; from inception, Malabu was a fraud, the EFCC found.

Messrs. Abacha, Etete and Adamu “were barred by extant laws from engaging in any form of business by virtue of their office,” the EFCC operative told the court.

“They (Messrs. Abacha Etete and Adamu) used their positions to confer unfair advantage on themselves and cronies in allocating OPL 245 to themselves without due process.”

Therefore, according to the EFCC, not only were Malabu shares fraudulently manipulated by Mr. Etete, Malabu itself illegally obtained the oil block from the Nigerian government.

OPL 245 was awarded to Malabu “against all known Government regulations” and “before a formal application was submitted by the company,” the EFCC found.

The Department of Petroleum Resources, DPR, to whom the court returned the bloc on Thursday, had also said that due process was not followed in 1998 when Malabu was awarded the oil block.

Shell
Shell

SHELL, ENI’s ROLES

The EFCC operative also told the court that investigations showed that Shell had always known of Malabu’s fraudulent past even before the 2011 deal.

After it was awarded the block, Malabu knew it had no technical expertise. Mr. Etete, therefore, approached Shell as a partner.

Shell knew that the allocation of the oil bloc was fraudulent and “the procedure adopted by the owners of Malabu Oil and Gas Ltd was fraught with fraud but went ahead to consummate the transaction,” the anti-corruption commission found.

The EFCC operative also said investigations showed that the $1.1 billion paid by Shell and Eni in 2011″was bribe to Dan Etete and his cronies.”

The commission confirmed PREMIUM TIMES earlier reports that it cooperated with security officials from Italy, Netherlands, U.S., UK and Switzerland in its investigations.

Italian authorities have since filed charges against Shell, Eni, staff of the companies, as well as Mr. Etete for the scandal.  Italian authorities have also asked the Nigerian government to hand overMr. Abubakar, the bagman, for questioning for his role in the shady deal.

Eni building
Eni

JUDGE’S RULING

In its ex-parte originating summons, the EFCC sought for an interim order that OPL 245 be managed by the DPR “on behalf of the Federal Government of Nigeria pending conclusion of investigation and prosecution” of officials of Shell, Eni, Malabu and others who partook in the deal.

The EFCC had in December filed money laundering and fraud charges against ex-attorney general Adoke, Mr. Etete and Mr. Abubakar. Charges are, however, yet to be filed in Nigeria against Shell and Eni.

Sources in the oil industry have also told PREMIUM TIMES that no activity is currently going on OPL 245 due to the various investigations.

On Thursday, Justice John Tsoho granted the order sought by the EFCC, thus effectively handing over OPL 245 back to the Nigerian government.


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  • Rommel

    The lead attorney representing the communities that took shell to court in UK requesting for trial said yesterday that it is instructive to note that no single court in Nigeria has been able to pass judgement against oil companies on matters of oil spillage,this for me was an eye opener which requires investigations to determine why this is the case,if it has anything to do with backhand dealings since it has been revealed that judgements in Nigeria for many years has been for the highest bidder,I was gutted when I heard it and I ask,are Nigerians immuned to shame?

    • Sanssouci

      The thing that gutted me and numbed me from further analysis on this matter is how a resource containing 9billion barrels of oil, gas not included, could be sold for such a pittance, these people truly hate Nigeria

      • Rommel

        It also reveals how the British have been engaging Nigerian political leadership all this while and for these leaders,as long as some money is paid into their foreign bank accounts,it does not matter what happens to Nigeria or Nigerians,I feel sorry for the people who based on ethnic sentiments have been agitating for these low lives, as at 2011 when Jonathan handed it over to Malibu and subsequent selling,a barrel of crude oil was selling for $100+ yet these people sold bloc containing 9 billion barrels for $1.097 billion,its shocking

        • Arabakpura

          All of them including Jonathan will have their comeuppance!

      • Julius

        Why I cant seems to close my mouth each time I read anything that has to do with this saga. It’s mind boggling. I do not think anything like this can or will happen in any other country but, Nigeria. People were running the country like their personal business. Unbelievable that it’s been done by the so called educated people.

  • ola

    Well, some sense of sanity seems to be emerging as EFCC can be seen doing nice work. Good judgement from the judge as well. the next thing is for the real trial to commence and justice to be seen served.

  • Essien Essien

    I agree with Ola totally. The real trial should commence and people like Dan Etete and other found culpable should not be seen moving freely and enjoying their ill gotten wealth. To be candid, $1.1 billion can solve a whole lot of problems in Nigeria in its current state.

    • Artful ºDodger

      The report said an Abacha owned 50% of malabu and Etete 30% why is the Abacha being shielded from these whole fraud? He too should be prosecuted along with the others and jailed.

      • Arabakpura

        The Abacha involved has died and that’s what gave Etete the impetus to falsify board proceedings and minutes to suit his evil machinations!

  • Repost007

    “Without competitive tendering and with full, unconditional exemption
    from all national taxes, the OPL 245 block was bought illegally in contravention
    of domestic laws. In total, $801.5 million was allegedly transferred to Etete’
    Malabu accounts; and $466 million out of the amount was used for remunerating
    government officials, including Jonathan and Alison-Madueke. A suspected
    “agent” of Jonathan, named Abubakar Aliyu, is alleged to have withdrawn a
    further $54 million and beneficiaries of the money went on a shopping spree
    buying property, aeroplanes, armoured cars.”

    ………..………..Italy Prosecutors’ filed charges in Italian Court

    (on Dan Etete’s OPL 245 Oil deal)

    (December, 2016)

    • Paul & Saul

      @essienessien:disqus :

      This is the first step to a forfeiture
      order by Nigeria’s High Court. Since the OPL 245 sale to Shell/Eni consortium
      it was illegal under Nigerian law. The effect of illegality is nullity. And
      that’s where the rub is because Eni Agip which paid the entire $1.1 billion in
      cash to buy into the oil bloc will not like to walk away. Eni Agip has seen the
      hand writing on the wall and will fight tooth and nail to recover the entire
      $1.1 billion it paid to buy what’s turned out to be a false sale. That means
      Eni/Agip will have to sue Nigerian government which received the money from
      Eni/Agip into its JP Morgan bank account in America; before passing it onto the
      JP Morgan account in London where Dan Etete then took out a crane to haul it
      away into the pockets of his six [6] criminal collaborators.

  • Ncustom Akhigbe

    BREAKING NEWS !!!! BREAKING NEWS !!! THE NIGERIA CUSTOM ARE AUCTIONING DIFFERENT TYPES OF CARS OUT, 2016 IMPOUNDED VEHICLES IS ON AGAIN ”’ YOU MAY CONTACT OUR OFFICE LINE CUSTOM STELLA ON ( 07035322790 ) TO PLACE AN ORDER OF YOUR CHOICE,, WE DELIVER NATIONWIDE

  • Artful ºDodger

    For those who have unreserved hatred for God, godliness and decency as they wail to eternity, Buhari may be a lot of things to you in your deliberate mischievousness, hypocrisy and the fact that satan colonized your souls. The man is honest, patriotic and is not stealing from Nigeria. He mean well and want to build a better Nigeria for the sane. Not that i owe any of you any explanation but want to drum some realities into your screwed up heads.

    In the meantime, the federal government should open the wells and begin sell the oil. It belong to Nigeria in the first place. Not any court, Etete, mohammed Abacha, Eni or Shell.

    God bless our troops
    God bless PMB
    God bless the federal republic of Nigeria(igbo retards not included)

    • Arabakpura

      The funny thing is that there was no Igbo man mentioned in the whole deal and yet you don’t want God to add His blessings to them?

    • Eva

      God Bless Nigeria!!!

  • Citilawandcases

    DEAR EDITOR,

    On this OPL 245 money-transfer, Mohammed Adoke could be ex-President
    Jonathan’s Achilles’ heel for assuring Jonathan and the general public
    that no criminal or civil liability would follow Jonathan’s private
    business here as
    A BROKER of a clearly private deal between SHELL OIL and MALABU OIL on the illegal sale of OPL 245 under
    the table; done in criminal side-step of Nigeria’s Off-Shore and Petroleum laws.

    Mohammed
    Adoke, an ignorant fellow, was of course dead wrong on point of law. He
    said the federal government – i.e. President Goodluck Jonathan –
    merely acted as an ‘obligor’ – to sound confident
    that no liability would ensue. But an obligor does not mean an innocent
    bystander in law but rather means a full participant as the
    counter-party to a transaction.

  • Arc_Deji_Alabi

    This is a major achievement by EFCC. I hope more high profile cases get convictions

  • Arabakpura

    This is heavy!