Malabu: Kachikwu asks Buhari to accept controversial agreement ceding OPL 245 to Shell, Eni

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

The Minister of State for Petroleum, Ibe Kachikwu, has advised President Muhammadu Buhari to cede controversial OPL 245 oil bloc to oil firms, Royal Dutch Shell and Eni.

Details of the advice was contained in a leaked memo written by the oil minister in December 2017 asking Mr Buhari to abide by a curious settlement agreement signed by his predecessors ceding the lucrative oil bloc to companies.

The memo was leaked as it emerged earlier on Thursday that Nigeria’s Attorney General, Abubakar Malami, told the Economic and Financial Crimes Commission (EFCC) that there may not be enough proof yet to show that fraud was allegedly committed by some former government officials in the $1.1 billion infamous deal.

Detail of Mr Malami’s memo was revealed during the trial of a former Petroleum Minister, Dan Etete, and former Attorney General, Mohammed Adoke, who interestingly had signed one of three agreements collectively referred to the Settlement Agreement, and others.

Mr Adoke’s lawyer, Kanu Agabi, asked the Abuja Division of the Federal High Court to strike out the charges against his client as they are illegal. He also told the court that the memo was proof of Mr Adoke’s innocence.

In the leaked Memo, titled: “Re: Forwarding of Case File in Respect of Charge No. FHC/ABJ/CR/268/17 and FCT/HC/CR/124/2017 – Malabu Oil & Gas Ltd”, Mr Kachikwu told Mr Buhari that he aligned with the advice of Mr Malami that the Federal Government should respect the resolution of the Settlement Agreement as it was consistent with “the consistent role of three (3) predecessor President in the matter, and the potential negative view of Nigeria that may follow should international arbitration ensue from this matter.”

Mr Kachikwu added that if Mr Buhari decided to go against the Settlement Agreement or “take steps that will undermine its integrity” it may turn out costly for the country.

The oil minister then explained that instead of abrogating the agreement, the Nigeria government should use it as a means of acquiring a stake in OPL 245 by converting it to a Production Sharing Contract (PSC) with Shell and Eni.

“This will not only ensure that Nigeria will bear no funding obligation for the development of the block, but will be a strategic, yet commercial, approach and solution to the OPL 245 issue which will ensure that Nigeria is focused on obtaining an immediate benefit from the OPL 245,” he wrote.

The ‘Settlement Agreement’

The agreement which was made on April 29, 2011, is made up of three separates resolution agreements. The first, titled “BLOCK 245 MALABU RESOLUTION AGREEMENT” was signed between representatives of the federal government and those of Malabu, which was represented during the discussions by a former petroleum minister, Dan Etete.

The second agreement, titled “BLOCK 245 RESOLUTION AGREEMENT” was between the Nigerian government and officials of Shell and Eni/AGIP; while the third agreement, titled “BLOCK 245 SNUD RESOLUTION AGREEMENT”, was signed by officials of the Nigerian government and Shell.

The immediate past attorney general of the federation, Mohammed Adoke, and immediate past petroleum minister, Diezani Alison-Madueke signed all the agreements on behalf of the federal government.

Both are among officials being investigated by Nigeria’s foremost anti-graft agency, the Economic and Financial Crimes Commission, for their roles in the scam.

According to the agreements, OPL 245 was first transferred to Malabu to the Nigerian government and then from the government to Shell and Eni. It also effectively cancelled all previous law suits and judgements related to the case.

It was based on these agreements that Shell and Eni paid a total of $1.3 billion into Nigerian government accounts, which as stated in earlier reports by PREMIUM TIMES, largely ended up in accounts of phoney companies and shady characters.

Cancel the agreement:

However, the position now taken by the Messrs. Malami and Kachikwu is contrary to the recommendation of a government committee Mr Malami himself set up.

Describing the agreement as “null and void” and saying it “should not be given any legal effect by the FGN (Federal Government of Nigeria) as doing so would amount to the FGN condoning and perpetuating illegality.”

The panel argued that the agreement is illegal because the ex-convict, Mr. Etete, had no legal authority to negotiate the agreement on behalf of Malabu as he was not a shareholder of the company nor had the permission of the shareholders to do so.

It also argued that the oil bloc was awarded to Malabu in furtherance of Nigeria’s policy to encourage local companies and part of the conditions for the award was that “foreign participation interest in the blocks (OPL 245 and 214) shall not exceed 40%, i.e. 60/40 indigenous to foreign;” a fact Shell was aware of but chose to ignore.

The committee said based on a resolution by the last House of Representatives, which called for the cancellation and demanded that Shell be “censured or reprimanded… for its lack of transparency and full disclosure in its bid to acquire OPL 245.”

Also, although Shell and Eni claimed they only struck an agreement with the federal government and that they did not know, before the agreement, that the money they paid was going to Malabu, evidence by investigators in Italy and the Nigerian anti-graft agency, EFCC, shows that the oil firms knew the payment was eventually going to Malabu accounts controlled by Mr. Etete, a man once convicted for money laundering in France.

Finally, the panel added that apart from the cancellation of the agreement, the Federal government should seek full recovery of the money paid by Shell and Eni, describing it as “proceed of crime.”

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