Malabu Scandal: Despite prosecution of Shell, top officials, Nigeria allows continued operation of oil block

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When Vice President Yemi Osinbajo addressed attendees at a two-day conference on ‘Beneficial Ownership’ in Jakarta, Indonesia, on Monday, he made reference to the Malabu scandal. Mr. Osinbajo said Nigeria was still grappling with the negative consequences of the use of secrecy by senior government officials and their cronies between 1993 and 1998 to award themselves juicy contracts in the extractive industry.

In Malabu oil scandal, then Minister of Petroleum Resources under the Sani Abacha administration, Dan Etete, used his official position to secretly allocate a lucrative oil prospecting license, OPL 245, to a company he had interest.

It is for this reason and several other corrupt acts involving the oil block that the anti-graft agency, EFCC, is pushing that the block returns back to the Nigerian government.

However, oil giants ENI and Agip, who secured the block from Mr. Etete in shady circumstances, are doing all they can to frustrate the EFCC including by negotiating with the petroleum ministry and the vice president.

Two days after PREMIUM TIMES reported that Italian prosecutors have charged Shell executives for their alleged roles in the controversial sale of OPL 245 oil field, Mr. Osinbajo met with the Minister of State for Petroleum, Ibe Kachikwu, to discuss commencement of production of crude oil on the disputed field.
The meeting, which also had the GMD of NNPC, Maikanti Baru, in attendance, focused on how Eni, through its Nigerian subsidiary Agip, could ramp up production of crude oil on the Zabazaba deepwater field, according to Mr. Kachikwu, who briefed reporters shortly after the meeting Wednesday.
It marks the latest in a string of discussions Mr. Osinbajo has chaired over the OPL 245 since the beginning of the year, as Buhari administration deepens business ties with Shell and Eni —the two multinational oil giants caught up in the raging $1.3 billion Malabu Oil scandal.
Mr. Osinbajo held a similar meeting with Mr. Kachikwu on May 9, during which the duo discussed the need to focus on the business side of the scandal rather than its potential criminal implications, which are already being investigated by the Economic and Financial Crimes Commission, EFCC.
A day after the latest discussion, Agip confirmed it was continuing with the operation of the Zabazaba field, which is part of the OPL 245 block.
A week ago, Italian prosecutors announced charges against top officials at Shell for their alleged roles in the 2011 deal which was supervised by former President Goodluck Jonathan.
Although the full list of the newly-charged suspects has not been disclosed, Global Witness quoted Milan Prosecutor’s Office as confirming that it included Malcom Brinded, second most senior official at Shell when the controversial deal was struck in 2011. 

Mr. Brinded, who was the head of upstream operations, was eased out of his position earlier this year when Shell started feeling the heat from the fallout over the scandal.
Barnaby Pace of the UK-based Global Witness told PREMIUM TIMES that Mr. Brinded and at least three other Shell executives would be arraigned alongside others that have been identified by Italian prosecutors as co-conspirators in the Malabu fraud.
Although Shell acknowledged it had prior knowledge that the deal involved a convicted money launderer, the company denied its officials directly participated in any bribery scheme.

In December 2016, prosecutors indicated their interest to charge 13 persons for their alleged roles in the oil deal.
Mr. Etete, was amongst those Italian authorities sought to charge last December, but their trials have not commenced. 


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“We’ve heard that the final preliminary hearing to rule on the prosecutor’s request for trial is at the end of this month so that’s the earliest we could have that decision,” Mr. Pace told PREMIUM TIMES Monday.
Milan prosecutors have investigated the Malabu deal since 2012 when suspicion began to mount over the deal.
Also in December 2016, the Economic and Financial Crimes Commission filed charges against Mr. Etete and a former Attorney-General Bello Adoke, both of whom remained at large in foreign countries.
The duo had long maintained no wrongdoing, saying the Nigerian and Italian authorities were on a witch-hunt.
Mr. Jonathan has also been identified as a person of interest in the deal, with the F.B.I. revealing that the former president probably received over $200 million in bribes to authorise the deal.
But the former president denied all allegations of criminal conspiracy in the scandal.
“We wish to make it clear that former President Jonathan was not accused, indicted or charged with corruptly collecting any monies as kickbacks or bribes from ENI by the Italian authorities or any other law enforcement body the world over,” Mr. Jonathan said in a statement in January.
About $520 million was said to have been shared between Mr. Jonathan and officials in his government, which included Mr. Adoke.
“This could be the biggest corporate bribery trial in history, and a watershed moment for the oil industry,” Mr. Pace said in a statement.
“The top brass of the UK’s largest company is in the dock after it finally admitted dealing with a convicted money launderer. 
“There can be no clearer sign that wholesale change is needed. Shell must first apologise to the Nigerian people, then take clear steps to reassure investors and the broader public that this won’t happen again,” Mr. Pace added.
But while authorities in different jurisdictions across Europe are focused like a laser on prosecuting all those involved, the Buhari administration appears fixated on whatever monetary value it could extract from the scandal.
“Total investment from Agip involved in both the Zabazaba field, the power plant and the new refinery is in excess of $15 billion,” Mr. Kachikwu said after a meeting with Mr. Osinbajo in May. “That is a major push in terms of our search for investment.”
The spokesperson for the EFCC, Wilson Uwujaren, did not respond to PREMIUM TIMES enquiries about how the presidency’s tête-à-têtes with Agip and Shell over OPL 245 could affect the anti-graft agency’s ongoing investigation and prosecution.

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