Malabu Scandal: After telling lies for years, Shell admits it knew Etete would benefit from $1.1 billion

epa05113059 (FILE) A file photo dated 30 July 2015 showing a company flag flying infront of the head office of Royal Dutch Shell in The Hague, The Netherlands. Royal Dutch Shell plc on 20 January 2016 reported a sharp fall in profits for the last quarter of 2015 as low oil prices hit earnings and the company restructured to reduce costs. Shell said it expected fourth-quarter earnings to be between 1.6 billion and 1.9 billion dollars, down from 4.2 billion dollars in the fourth quarter of 2014. Full-year earnings, including the impact of lower prices on the company's oil inventory, are expected to total 10.4 billion to 10.7 billion dollars, about 45 per cent lower than the 19 billion dollars reported in 2014.  EPA/JERRY LAMPEN [Photo Credit: Financial Times]
epa05113059 (FILE) A file photo dated 30 July 2015 showing a company flag flying infront of the head office of Royal Dutch Shell in The Hague, The Netherlands. Royal Dutch Shell plc on 20 January 2016 reported a sharp fall in profits for the last quarter of 2015 as low oil prices hit earnings and the company restructured to reduce costs. Shell said it expected fourth-quarter earnings to be between 1.6 billion and 1.9 billion dollars, down from 4.2 billion dollars in the fourth quarter of 2014. Full-year earnings, including the impact of lower prices on the company's oil inventory, are expected to total 10.4 billion to 10.7 billion dollars, about 45 per cent lower than the 19 billion dollars reported in 2014. EPA/JERRY LAMPEN [Photo Credit: Financial Times]

After repeated denials in various countries, Anglo-Dutch oil giant, Royal Dutch Shell, on Monday finally admitted it had foreknowledge that the $1.3 billion itself and ENI paid to Nigerian government for the OPL 245 oil block licence would ultimately be used to settle convicted former Minister of Petroleum, Dan Etete.

“Over time, it became clear to us that Etete was involved in Malabu and that the only way to resolve the impasse through a negotiated settlement was to engage with Etete and Malabu, whether we liked it or not,” The New York Times quoted Andy Norman, a spokesperson for Shell, as saying in an email Monday.

The Dutch oil giant knew the Nigerian government “would compensate Malabu to settle its claim on the block,” Mr. Norman added.

The confession came a day after intercepted telephone conversation between Shell’s chief executive, Ben van Beurden, and his then chief financial officer, Simon Henry, revealed the oil firm knew Mr. Etete was the main beneficiary of the multi-billion dollar deal.

Shell and ENI had hitherto maintained ignorance that Mr. Etete would benefit from the deal prior to the settlement agreement that was reached with Goodluck Jonathan’s government in 2011. The agreement saw Shell and ENI assume ownership of the lucrative oil field after paying $1.1 billion to Malabu via a Nigerian government account. Another $200 million had earlier been paid by Shell.

Past denials

Shell had in the past told PREMIUM TIMES and others that it did not know its payment would end up with Mr. Etete or Malabu.

“Shell was not aware that that money was to be paid to Malabu,” Precious Okolobo, a communications officer with Shell, told PREMIUM TIMES by telephone in May 2012.

“As we have previously stated, no payments were made by any Shell company to Malabu Oil and Gas in relation to the issuance by the Federal Government of Nigeria (FGN) of the OPL 245 licence to Shell Nigerian Exploration & Production Ltd and Nigerian Agip Energy (NAE).” Andrew Vickers, Shell’s Vice President NGO and Stakeholder Relations, said in a 2015 letter to Global Witness, an anti-corruption campainger.

Shell and Italy’s ENI had issued other similar denials since then. But the latest revelations, which were part of an ongoing probe of the deal by Italian authorities, have now put the oil majors on the defensive.

But Shell officials, nonetheless, maintained that they “believe that the settlement was a fully legal transaction,” the New York Times reported.

Global Witness said in a statement that the leaked phone conversations of Shell executives forced the company to finally give in.

“This is a huge U-turn that reveals Shell’s duplicity,” Simon Taylor, founder of Global Witness, said in an email to PREMIUM TIMES Monday night.

“For six years it has asserted it only paid the Nigerian government, insisting it has “never been anything but transparent” about the deal for the oil block, and that its actions were “morally OK”.

“Now its private emails have come to light, Shell has admitted it dealt with Etete – a convicted money launderer – to ensure it got its hands on this valuable oil block, at the expense of the Nigerian people.

“This shows that Shell has not only knowingly deprived a country of life-saving funds, but has repeatedly misled its investors and the broader public over this corrupt deal.”

Mr. Etete, who was petroleum minister under Sani Abacha. had awarded the oil block to Malabu, a company he partly owned alongside Mohammed, Mr. Abacha’s son, in contravention of Nigerian laws.

The OPL 245 oil block, believed to contain more than nine billion barrels of crude oil, is considered one of the richest oil blocks in Africa.

In 2007, Mr. Etete was convicted in Paris in a different case that bordered on money laundering.

Monday’s revelations came a day after PREMIUM TIMES reported that Mr. Jonathan might have received up to $200 million in bribes to approve the controversial deal.

The report was based on Italian court documents obtained by BuzzFeed and Italian business newspaper, Il Sole 24 Ore.

In the documents, Italian prosecutors quoted Ednan Agaev, a middleman who helped negotiate the transfer of the oil block to Shell and Eni, as saying that Dan Etete, the former Petroleum Minister at the heart of the oil scandal, said he intended to dole out as much as $400 million in bribes if the deal went through.

If Mr. Etete actually paid out such an amount in bribes to Nigerian officials, “Agaev stated that he would think President Goodluck Jonathan got at least $200 million of this money,” BuzzFeed quoted an excerpt of FBI submissions to Italian authorities as saying.

The revelations were made when the FBI interviewed Mr. Agaev, whom prosecutors also said met with Mr. Jonathan on more than one occasion in Nigeria during the OPL 245 negotiations.

Mr. Agaev, who was Mr. Etete’s representative in the negotiation, said the convicted former petroleum minister told him of the $400 million bribe to Nigerian politicians when he approached him for his payment.

He also repeated the claim in a follow-up interview with Italian prosecutors, led by Fabio De Pasquale in Milan.

“I said that if it’s true, that he paid, he had to pay 400 million, I assume that at least 200 went to Goodluck (Jonathan).”

“I heard from Chief (Etete), he claims that he had to pay 400 million, so, if this is true, if he paid 400 million, then most probably the President, as the biggest boss, took at least the half of it,” BuzzFeed wrote, quoting documents prepared by Italian prosecutors.

Mr. Jonathan’s spokesperson, Ikechukwu Eze, could not be reached for comments about the latest revelations. But he denied the former president’s involvement in a January 10 statement about the Malabu oil deal.

“We wish to make it clear that former President Jonathan was not accused, indicted or charged for corruptly collecting any monies as kickbacks or bribes from ENI by the Italian authorities or any other law enforcement body the world over,” the statement said.


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  • Dan maikoko

    “We wish to make it clear that former President Jonathan was not accused, indicted or charged for corruptly collecting any monies as kickbacks or bribes from ENI by the Italian authorities or any other law enforcement body the world over,”
    That is the Gospel truth. But wait until more people talk and more papers appear then he will not only be indicted, he will be convicted.

    • Sword of Damocles

      Mr. Jonathan’s spokesperson, Ikechukwu Eze (Jan. 10th, 2017)

      always give ownership of QUOTES(it provides CONTEXT). Danke schon

      • Dan maikoko

        Sorry for not quoting properly. I just assume the story is current.

    • Local Observa

      @disqus_jDyTIhC4Xm:disqus

      One cannot reallysee how
      OPL245 will be resolved other than by Nigeria’s government forfeiting it as
      proceed of crime if Nigeria is to remain in good standing with the
      international community on this oil bloc scandal. The consequence of that
      projection is that Eni/Agip will have to recover its $13 billion from the hands
      of those who pocketed it. There’s simply no third way to go on this matter.
      Anyone who partook in sharing the $1.3 bounty will ultimately be slammed with a
      civil lawsuit for recovery. Eni/Agip will never walk away and allow its
      whopping $1.3 billion go down the drain on an oil bloc allocation that’s now
      turned into a fiasco. The Nigerian media may look the other way as if no such
      thing will happen but that’s mere wish unless the media can assure Eni/Agip
      ownership of the OPL oil bloc 245 over against Nigeria’s clear refusal to
      grant.

  • Rollingdollar

    What happened in one oil block, happens in other oil blocks. TY Danjuma confessed how Abacha dashed him an oil block, and he sold it and made cool millions of dollars . So I call on government to Probe ALL oil block allocations NOW

    • Izedomi Ohirein

      Few ministers in this government are Danjuma’s nominees.
      While Danjuma’s case could pass as pure business, we have nacked outright stealing cases like Malabu to contend with.
      That Abacha dashed Danjuma Oil Well might not mean that government fee was not paid. It could mean that the kickbacks, often more than government fees were not paid.

      • dan

        You seem to be confused, it is the same way that Abacha dashed Danjuma oil field 246 that he dashed his son Mohammed and Etete oil field 245, but Etete outsmarted Mohammed when Abacha died and took total control of Malabu.

        • Izedomi Ohirein

          You are the one who has no clue, that Danjuma already had Oil Well before Abacha sized power. While Oil Well to his Son could be classed as nepotism & illegal, Oil Well to Danjuma might be seen differently
          Again dashing Oil Well to Danjuma might not mean that government fee were not paid. It means the corruption charged were avoided,
          You said Etete outsmart Abacha’s Son. That is the problem.
          I first read about this scam in 2014. Malabu was named & Danjuma was not named.

  • Emeka

    We are not in a hurry to knowing if GEJ partook of the fraud money or not, since it took shell six solid years to admit today they knew etete would benefit from the fraud, so we still wait patiently to seeing or hearing the confession of those involved some day…

  • Osakue

    Breeze done open fowl yansh

  • Patrick Otobo

    Why is PremiumTimes reluctant to investigate the role played by Olusegun Obasanjo in the Malabu scandal? It was obasanjo that revoked OPL 245 and restored it back to Malabu. Is Malabu the only oil block to be sold at a super premium? General Danjuma sold 50% of his stake in OPL 246 to the chinese for a billion dollars and he even announced to the whole world that he doesn’t know what to do with money at his age, yet it did not generate this kind of interest from PremiumTimes. PremiumTimes is doing a hatchet job for some people!!!!

    I recall the last intreview where OBJ said he will applogise to Nigeria if there is any record to show that he was involved in Malabu scandal. Report by theCable the following day indicates that OBJ approval the restoration of OPL 245 licence back to Malabau and it was conveyed by Edmound Daukoru, then OBJ’s Minister of State of Petroleum. PremiumTimes will be doing us a big favour by asking OBJ to tender the apology. We are waiting!!!

    • Julius

      How much money that ENI or any other entities involved paid to the FGN or Obj when he made the approval ?

      • Patrick Otobo

        The signature bonus (US$210) for the block has been fully paid.

        • Julius

          Paid to Obj ?

  • Patrick Otobo

    Why is PremiumTimes reluctant to investigate the role played by Olusegun Obasanjo in the Malabu scandal? It was obasanjo that revoked OPL 245 and restored it back to Malabu. Is Malabu the only oil block to be sold at a super premium? General Danjuma sold 50% of his stake in OPL 246 to the chinese for a billion dollars and he even announced to the whole world that he doesn’t know what to do with money at his age, yet it did not generate this kind of interest from PremiumTimes. PremiumTimes is doing a hatchet job for some people!!!!

    I recall the last intreview where OBJ said he will applogise to Nigeria if there is any record to show that he was involved in Malabu scandal. Report by theCable the following day indicates that OBJ approved the restoration of OPL 245 licence back to Malabau and it was conveyed by Edmound Daukoru, then OBJ’s Minister of State of Petroleum. PremiumTimes will be doing us a big favour by asking OBJ to tender the apology. We are waiting!!!

    • share Idea

      My gee please do not waste your time with APC propaganda. They have thrown everything at GEJ and his administration but it does not stick and they are afraid that the only pillar still holding the opposition party have not not been abandoned by both local and international people.

      If anybody had listened to how BBC reported the news yesterday and compare to transcript that was carried by Nigerian media, the person will come to conclusion that the current efforts are just targeted at diminishing the pillar of opposition party in Nigeria.

      Can any Nigeria claimed that they are aware of how oil blocks were distributed to cabals in the past? If other cabals are allowed to enjoy their allocated oil wells, why fixated on this one that was originally allocated to Etete.

      If the government is really concerned that state is cheated in the transaction, can they review every other allocations.

  • Olatubosun

    Nigeria will rise again