Malabu OPL 245: We did no due diligence – DPR

Former Minister Dan Etete, the man behind Malabu
Former Minister Dan Etete, the man behind Malabu

Nigeria’s Department of Petroleum Resources admitted on Tuesday that no due diligence was carried out prior to the awarding of Oil Prospecting Licence 245 to Malabu Oil in 1998.

The oil block, considered the richest in Africa, is estimated to contain about 9 billion barrels of crude.

The licence was awarded during the regime of a former military dictator, Sani Abacha, under the supervision of then Minister of Petroleum, Dan Etete.

PREMIUM TIMES had reported how Mr. Etete, using a fictional character Kwekwu Amafegha, owned 30 per cent of Malabu at inception in violation of Nigerian laws. The other shareholders were Mohammed Sani, Mr. Abacha’s son (50 per cent) and Hassan Adamu, a former Nigerian Ambassador to the U.S. (20 per cent).

After years of controversy that saw OPL 245 changing hands between Malabu, the Nigerian government, and oil giant Shell, the Nigerian government received about $1.1 billion through an escrow account with JPMorgan from Shell and another oil major, ENI, for the block. The government then transferred majority of the funds to accounts controlled by Mr. Etete in a suspicious deal that has been a subject of sweeping investigations across four jurisdictions.

At a resumed hearing on the controversial deal by the Nigerian parliament on Tuesday, Joseph Tolorunse, the Director of Legal Services at DPR, said the regulator only took instructions from ‘top level’ government functionaries when the block was originally allocated.

Mr. Tolorunse said his department only confirmed payments for the licence but didn’t participate in the process leading up to the selection of Malabu Oil as the recipient of a prospecting licence for the lucrative oil field.

“In 1998, an instruction came from the head of state that we should give licence for the OPL 245 to Malabu,” Mr. Tolorunse said. “It was based on an application they submitted to the head of state at the time.”

Mr. Tolorunse said he was only able to confirm that Malabu Oil paid N50,000 as application fee to the government at the time. The firm also paid $10,000 for the processing of bilateral investment terms.

However, the $20 million that was meant for signature bonus was not paid by Malabu. Instead, the firm paid about $2 million in advance fee and later gave the government a cheque for the $18 million balance which failed to clear.

Summary of Malabu's history

The alleged sharp practices, as well as political interests in the block, led the Olusegun Obasanjo government to withdraw the award of the oil licence from Malabu in 2000. It was later allocated to Shell via a selective bidding process between 2001 and 2002, before it was later withdrawn from the oil giant, also by the Olusegun Obasanjo administration.

The Nigerian government later in 2009 brokered a fraudulent deal that led to the transfer of the oil block to Shell and ENI with the oil majors paying about $1.1 billion through the federal government to Malabu accounts controlled by Mr. Etete.

Although Shell and Agip had long maintained innocence since the fraud was first uncovered, PREMIUM TIMES investigations as well as a leak of internal emails of the companies later indicated their involvement.

Infographic---Malabu

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  • GusO

    Confusing but it is clear that this fraud was committed during the Jonathan administration in 2009. It’s incredulous the amount of fraudulent activities that took place during the Jonathan administration. Access to Nigerian resources was governed as if it was his personal fiefdom.

  • Dazmillion

    This malabu transaction was the first major fraud committed by Jonathan when he first assumed power. It was a template of corruption he was to continue practicing throughout his tenure

    • Burning Spear

      God punish yr useless thieving ancestors—-if any————-in yr rotten regional life—————-Besides was it Jonathan that gave the said oil wells to Etete or Abacha————————This is how your people often attempt to demonize the Ijaws for the Fulanis——————————ati Yoruba————–go and challenge the oil wells allocated to Danjumah mumu—-thief————-an-

      • Charles

        Can you educate me why Abacha was mentioned and what role he played.

  • Izon Redeemer

    Only a Nigerian thief if not a complete mental case will challenge Ijaw man Etete on the allocation of the said oil well to an indigene of the Niger Delta——————by Abacha———————The true story of the oil allocation to an Ijaw man—-by a Kanuri president—late abacha was the first in the history of Nigeria—-Etete was the first Ijaw man to be gifted with an oil well –Aware———Two crude oil wells were handed over to two individuals by Abacha————–The beneficiaries are TY Danjuma and Etete———–DANJUMA who does not hail from the South South–sold his crude oil well for over 1b dollars————–Not one Nigerian challenged Damjumah———or declared that due process was not followed when Abacha handed over the oil well to dajumah————-But when it got to the turn of Ijaw man Etete——-Nigeria said naaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaa—————–because of the Ijaw tribal marks of etete———–The question I ask is which due process was followed by Abacha when he allocated the said oil wells to Danjuma from Taraba state—-? I have often—-declared that the Ijaw Nation are wasting their time in Nigeria—————–Yeterday the Fulanis—-Yorubas and Ibos seized All states bank—–then stole Crystal Bank from another Ijaw man———–Not before they ganged up against another Ijaw leader Jonathan—–Not one Ijaw elite has ever been favoured in the allocation of oil wells since oil was discovered in Nigeria—in 1957—–It is better for the ijaws to die fighting for their rights than allow the tripod control the destiny of their children————Sadly the very people Ijaws often described as slaves some 50 fews ago– are now in charge of their lives——————-in the creeks of the niger delta————————–animals———————–

  • Oilcrimes Watch

    Editor Premium Times,

    OPL 245 illegal sale at $1.2billion is a proceed of THEFT

    Malabu oil company did NOT pay any $20 million signature bonus in 1998 or at any time thereafter.
    The body of your main story (above) got that fact right, but your illustrative chart got the fact wrong.
    OPL 245 was a clear case of STEALING by General Sani Abacha and Chief Dan Etete in concert.
    Neither man should be entitled to the proceeds of theft; now that Abacha’s sons claim ownership.
    It is an insult to Nigerians that General Abacha’s sons want to inherit their dad’s theft proceeds.
    President Buhari will reach the zenith of his own corruption to permit such criminal inheritance.

    Ditto for Abacha’s crime partner – Chief Dan Etete; who was convicted as “a criminal” in France.
    Chief Dan Etete who will remain an ex-convict for the rest of his life is not entitled to OPL 245.
    It was Dan Etete who got ex-President Jonathan to sign a bogus $1.2 illegal sale of OPL 245.
    Thereafter, ADOKE MUHAMED, DAN ETETE, and GOODLUCK JONATHAN shared the loot.
    Five [5] other middlemen; including a Russian citizen, were paid from the $1.2 billion fraud.
    All this money must be recovered and these named criminals must be arrested and jailed.

    • Charles

      you said ”It was Dan Etete who got ex-President Jonathan to sign a bogus $1.2 illegal sale of OPL 245” but the article have it thus: The license was awarded during the regime of a former military dictator, Sani Abacha, under the supervision of then Minister of Petroleum, Dan Etete, pls can you reconcile these two statement so I can understand.
      remember that there have been three heads of state before Goodluck Jonathan.

      • Oilcrimes Watch

        @disqus_4OC5pf9T3n:disqus: The illegal sale of OPL 245 was authorized by President Goodluck Jonathan
        on the corrupt advice of the then attorney-general Adoke Muhammed who is now a fugitive,
        having fled to Holland to escape and detention for this $1.2billion scam. President Jonathan
        said he approved the (illegal) sale of OPL 245 to shell so as to put an end to all court cases,
        but that tenuous explanation, even as alibi, is worse than nonsense, because the law says
        that under no circumstances must an oil bloc allocated to a Nigerian under an Indigenisation
        Plan be sold outright to a foreign company. The law also says that no foreign company may
        invest or own more than 40% in an oil bloc awarded under an Indigenisation oil program.

        • Izon Redeemer

          Mumu brainless fool—————was it Jonathan that approved the sale of the said oil block–to Etete or late Abacha—–Besides–was this very case not handled by Obj who started it all————————-because he was hoping to seize the oil wells from Ijaw man Etete? Did he Obj achieve his objectives——even after using the French to threaten Etete……?…………….Go on tell Nigerians why the oil block that the same Abacha gave Danjumah is not being contested by the Ibos——?——————-animals

    • Izon Redeemer

      U are as I said a mental case————–a brainless fool—————-two oil wells were given by Late Abacha to Danjumah and Etete—————-that of Danjumah is not being contested by any of the major dirty unthinking thieving so-called major ethnic groups in Nigeria——————-Danjumah was allowed to sell his oil well——But when it got to that of Ijaw man Etete the Ibos went to court–to demand a pound of flesh of the Ijaws————–is Abachas son the one who took Etete to court or the Ibos whom Etete foolishly sold his dirty inferiorized Ijaw soul to—-via his former Ibo wife—-ANIMAL

  • Burning Spear

    Only a Nigerian thief if not a complete mental case will challenge Ijaw man Etete on the allocation of the said oil well to an indigene of the Niger Delta——————by Abacha———————The true story of the oil allocation to an Ijaw man—-by a Kanuri president—late abacha was the first in the history of Nigeria—-Etete was the first Ijaw man to be gifted with an oil well –Aware———Two crude oil wells were handed over to two individuals by Abacha————–The beneficiaries are TY Danjuma and Etete———–DANJUMA who does not hail from the South South–sold his crude oil well for over 1b dollars————–Not one Nigerian challenged Damjumah———or declared that due process was not followed when Abacha handed over the oil well to dajumah————-But when it got to the turn of Ijaw man Etete——-Nigeria said naaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaa—————–because of the Ijaw tribal marks of etete———–The question I ask is which due process was followed by Abacha when he allocated the said oil wells to Danjuma from Taraba state—-? I have often—-declared that the Ijaw Nation are wasting their time in Nigeria—————–Yeterday the Fulanis—-Yorubas and Ibos seized All states bank—–then stole Crystal Bank from another Ijaw man———–Not before they ganged up against another Ijaw leader Jonathan—–Not one Ijaw elite has ever been favoured in the allocation of oil wells since oil was discovered in Nigeria—in 1957—–It is better for the ijaws to die fighting for their rights than allow the tripod control the destiny of their children————Sadly the very people Ijaws often described as slaves some 50 fews ago– are now in charge of their lives——————-in the creeks of the niger delta————————–animals———————–