A Review of the Nigerian Energy Industry

Malabu Oil deal: I acted in public interest, AGF replies Reps

NIGERIA's Attorney General and Minister of Justice, Mr. Mohammed Bello Adoke, SAN18 July 2013, Abuja – Attorney General of the Federation and Minister of Justice, Mohammed Bello Adoke, has denied any wrong doing in multi-bilion naira Malabu oil contract saga involving Oil Prospecting License, OPL, 245.

Adoke, in a statement released by his Chief Press Secretary, Mr Ambrose Momoh said that he acted in public interest in resolving the long standing division involving Malabu oil and Gas, Shell and Agip companies.

Contrary to his alleged indictment in a report by the House of Representatives on the mater, Adoke said that the advertised report in the media was off the mark as it failed to take into account the role played by the Federal Government in resolving a long standing business fued.

He said that his actions were informed by government’s policy of encouraging indigenous participation in the oil and gas sector.

According to Adoke, though the dispute between Malabu and Shell predates his tenure in office, records have shown that “the Federal Government in furtherance of its Indigenous Exploration Programme Policy introduced in the early 1990s to encourage effective development of indigenous capability in the upstream sector of the oil industry, allocated Oil Blocks to indiginous Oil and Gas Companies which they were expected to develop in partnership with international oil companies as Technical Partners.”

He stated that Malabu Oil and Gas company was allocated OPL 245 in April, 1998 and that it later contacted Shell as its Technical Partner but that when the oil block was revoked in 2001, Shell went behind and got re-awarded the oil block, leading to seemingly endless litigations.

“Although, Malabu was issued a licence for Block 245 in April 2001, the same licence was subsequently revoked by the Federal Government on 2nd July, 2001. Exxon-Mobil and Shell were then invited in April 2002 to bid for OPL 245, despite the existence of subsisting contractual agreements between Malabu and SNUD with respect to OPL 245. Malabu was dissatisfied with the revocation and contended that the circumstances leading to the revocation of its licence on Block 245 was less than transparent and smacked of inducement and connivance from SNUD, which at the material time was its technical partner”.

The Minister stated that Malabu had contended that the subsequent re-award of OPL 245 to Shell by the Federal Government was done under questionable circumstances.

He stated that whereas a report of the House of Representatives which probed the transaction at the initial stages had confirmed Malabu as the rightful owner and recommended the return of oil block to its, recent claims being attributed to the current House of Representatives were off the mark.

“It is important to note that the House of Representatives Committee on Petroleum found no rational basis for the revocation and reprimanded Shell for its complicity. The Committee also directed the Federal Government to withdraw the re-award it made to Shell and return OPL 245 to Malabu, the original allotee of the Block.”

Adoke stated that while all entreaties appeared to be falling on deaf ears, the administration of President Goodluck Jonathan decided to intervene in 2010 to resolve the outstanding trade dispute by serving as intermediary.

He said that Malabu had petitioned the government and drawn its attention to the long standing dispute.

The statement read: “To resolve all the contending claims in a satisfactory and holistic manner, due regard was given to the Terms of Settlement of 30th November 2006 which had been reduced to Orders of the Court, the underlying policy of encouraging the participation indigenous oil and gas companies in the upstream sector of the oil industry and the fact that Shell had substantially de-risked Block 245.

“To accommodate all these interests, a Resolution Agreement dated 29th April, 2011 between the Federal Government of Nigeria and Malabu Oil & Gas Limited was executed wherein the FGN agreed to resolve all the issues with Malabu in respect of Block 245 amicably and Malabu also agreed that in consideration of receiving compensation from the FGN it would settle and waive any and all claims to any interest in OPL 245.”

It added that the role played by the Attormey General was that of a facilitator of the resolution.

“It is therefore quite evident from the foregoing that the role played by the Federal Government, its agencies and officials in relation to Block 245 was essentially that of facilitator of the resolution of a long standing dispute between Malabu and SNUD over the ownership and right to operate Block 245. At all times material to the resolution of the dispute, the Federal Government was not aware of any subsisting third party interest in Malabu’s claim to OPL 245 and neither did any person or company apply to be joined in the negotiations as an interested party until the resolution of the dispute was concluded”.

The Minister wondered why a business transaction involving some shareholders would take the attention of the House to the extent of passing a resolution.

He concluded: “We know those who have compromised their positions in order to author the alleged ‘Report’ and their theatrical display for public gallery. We also know those secretly beating the drums for masquerades dancing in the market square. We shall confront them at the appropriate forum. How else can one explain why the ownership of shares in a private company would generate sufficient interest among members of the legislature so as to merit a resolution of a Committee that certain persons or companies are entitled to ownership of shares in a private company, when the courts are the appropriate venue for the ventilation of such disputes between share holders (if any).”

. Nigerian Tribune.

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