UK court lifts lid on sharing proceeds of Nigeria’s OPL 245

Old Bailey27 March 2014, London – A Appeal Court in London has lifted an earlier order that halted the distribution of proceeds of the sale of a Nigerian deep offshore oil block believed to have been fraudulently awarded to Anglo Dutch firm Shell and Italy’s Eni by the Nigerian government.

A global anti-corruption crusader Global Witness, which has been following closely the legal battle over the controversial oil block OPL 245 deal, said it  condemned the court ruling and said the court should rather had frozen the $200 million prize money being proceeds from the deal

“The court on Wednesday formally lifted the stays on the money, so the $200 million from the OPL 245 deal is now free to be distributed,” Global Witness’s  said through Oil Campaigner, Barnaby Pace said in a statement

“Global Witness is extremely disappointed in this ruling by the UK courts. This money should have been frozen until the investigations into OPL 245 in the UK, Italy and Nigeria can be concluded,” it said.

Shell and Eni paid $1.09 billion to acquire 50% stakes each in Oil Prospecting License (OPL) 245 in 2012, originally owned by an indigenous Nigerian company, Malabu Oil and Gas, Platts previously reported.

The UK legal case is however, being fought between Malabu and an agency, Energy Venture Partners Ltd., represented by one Emeka Obi, which said it brokered the deal for the sale of the oil block and had sued Malabu demanding to be paid $200 million.

Following the court ruling, the middleman is to receive $110 million, while the balance of $90 million will go to Malabu, Global Witness explained.

“It is disgraceful that the UK courts should be used as arbiters to carve up the loot from this highly suspicious and possibly illegal deal. This appears to be the equivalent of divvying up the proceeds from a bank robbery without considering the legitimacy of the funds in question,” Global Witness director Simon Taylor had said in a statement on Tuesday.

In July 2013, the court provisionally awarded him US$110.5 million, 8.5% of the money paid by Shell and Eni.

In February the House of Representatives urged the Nigerian government to revoke the oil license, which officials estimate to hold over 1 billion barrels in oil reserves, on grounds that the award of the asset to Shell and Eni lacked transparency and breached Nigerian laws.

The Justice Minister Mohammed Adoke said in May 2012 that Shell and Eni paid the $1.09 billion to Malabu Oil and Gas, while the government acted as an obligor.

Rights groups in Nigeria have faulted the payment on the grounds that money should have been paid into the Federation Account and not to Malabu, a company confirmed to be owned by an ex-oil minister, Dan Etete, who in 2007 was convicted in France of money laundering.

UK’s Proceeds of Corruption Unit had begun investigation into the deal while last week Italian prosecutors in Milan were also investigating the deal, Global Witness said in the statement.

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