A Review of the Nigerian Energy Industry

Malabu scam: Civil group files case to force govt takeover of oil block

*Instruments of dispensing justice.

OpeOluwani Akintayo

08 May 2018, Sweetcrude, Lagos – A Nigerian civil society organisation, the Human Environmental Development Agenda, HEDA, has filed a court case to force Federal Government’s seizure of the Malabu oil block.

The case, which will be heard today at the Federal High Court of Nigeria, is asking the Nigerian Attorney General “to appear on May 8″.

During the hearing, HEDA will demand that the government take back the Oil Prospecting Licence, OPL, 245 issued to Eni and Shell due to high-leveled corruption surrounding the deal.

The group is also asking that the government “revokes the OPL 245 on grounds that the entire Malabu transactions in relation to OPL 245 is unconstitutional, illegal and void as it was not legally granted, same having been obtained fraudulently vide corrupt practices”

In the suit, HEDA accused Eni and Shell “of currently being in possession of a license tainted by the original allocation of the license in 1998 to Malabu Oil & Gas, where former Nigerian Oil Minister Dan Etete has a stake under a pseudonym, constituting the height of conflict of interest and corrupt practices.”

HEDA also points to the Nigerian state’s own arguments in a related UK court case that the 2011 deal for the block with oil giants Shell and Eni was corrupt.

Speaking on the suit, Chairman, HEDA, Lanre Suraju, said: “This action is instituted to expose the players in the notorious Malabu scandal in which extant local laws and policies were breached and blatantly ignored. We shall use the law to retrieve this national asset from unscrupulous persons and corporations”.

“This corrupt deal is spawning legal action all over the world. Global Witness wholeheartedly supports the move to revoke the rights to this oil block. Shell and Eni should not be allowed to profit from their appalling behaviour, and other oil companies should take note: it is no longer business as usual in the oil industry” said Barnaby Pace of Global Witness.

Shell and Eni currently hold the license and are pursuing a $13.5bn investment plan to develop the oil field.

The companies have been dogged by corruption allegations around their 2011 deal to buy the block and are facing an unprecedented bribery trial which is scheduled to start in Italy on May 14. No company as large as Royal Dutch Shell has ever stood trial for bribery offences.

The criminal case brought by the Milan Public Prosecutor alleges that $520 million from Shell and Eni’s payment for the 2011 deal was intended to be paid to the then Nigerian President Goodluck Jonathan and other Nigerian government officials. The prosecutor further alleges that money was also channeled to Eni and Shell executives with $50 million in cash delivered to the home of Eni’s then Head of Business for Sub-Saharan Africa, Roberto Casula.

Both Shell, Eni and their executives have denied all charges against them in court.

Antonio Tricarico of Italian NGO Re: Common said, “This case heralds the dawning of the age of accountability, a world where even the most powerful corporations can no longer hide their wrongdoing and avoid justice.”

For years, Shell had claimed that it only paid the Nigerian government for the oil block. But after the joint investigations of Global Witness and Finance Uncovered, Shell confessed it had dealt with convicted money launderer and former oil minister Dan Etete. Etete had awarded the OPL 245 oil block to his secretly owned company, Malabu, while serving as oil minister.

“This is not a case involving a few rotten apples,” said Nick Hildyard of Corner House. “The evidence points to systemic corruption – from the top down.”

A Shell spokesperson referred Global Witness to the company’s statement following its indictment, saying: “We are disappointed by the outcome of the preliminary hearing and the decision to indict Shell and its former employees. We believe the trial judges will conclude that there is no case against Shell or its former employees.”

Eni has said in a statement on their website regarding the case that the trial “will give the opportunity to Eni to fully defend its position and to provide full evidence of the correctness of the actions taken with respect to the OPL 245 transaction.”

Regarding the allegations against Eni’s CEO, the company said: “Eni’s Board of Directors has reaffirmed its confidence that the company was not involved in alleged corrupt activities in relation to the transaction. The Board of Directors also confirmed its full confidence that chief executive Claudio Descalzi was not involved in the alleged illegal conduct and, more broadly, in his role as head of the company. Eni expresses its full confidence in the judicial process and that the trial will ascertain and confirm the correctness and integrity of its conduct.”

Adoke admits to scam

Just last week, Nigeria’s former Attorney-General of the Federation, AGF, Bello Adoke, admitted to knowing that the deal was a scam.
He made the acknowledgment on a newly surfaced recorded telephone conversation in court, saying the deal was a “presidential scam”.
In the latest material, the recorded telephone call was placed by Carlamaria Rumor of RAI Television in Italy.
Adoke played a major role in the corruption deal which led to transfer of billions of dollars into accounts of his accomplices both in Nigeria and in other countries.
The audio which was filed before a Milan court has been accepted as an exhibit.
In the 1hour 17 minutes conversation held on November 5, 2015, Mr Adoke appears to be telling Ms Rumor that Dan “Etete collaborated with some Italian oil workers” to “divert some funds to foreign accounts” in an “illegal” move that “betrayed” the agreement which the Nigerian government had with Italian oil giant Agip-Eni and Royal Dutch Shell on the one hand and Malabu Oil and Gas on the other.
Adoke, AGF from 2010-2015, admitted that Mr. Etete, an ex-convict, was actively involved in the talks held between Nigerian government officials, representatives of Agip-Eni, Shell, and other players.
This indicates that Mr. Adoke recognised Mr. Etete as the owner of Malabu Oil and Gas and dealt with him accordingly, thereby sidestepping Mohammed Abacha and other beneficial owners of the controversial oil firm.
A few years before the deal, Mr. Etete, former petroleum minister, had been convicted in France for money laundering, with the ‎French appeal court upholding the judgment. In negotiating with Mr. Etete, Mr. Adoke apparently ignored his criminal past and other red flags raised about him and Malabu to authorise the deal.
The audio also marks the first time Mr. Adoke, at large for over two years now, would appear to be admitting personal knowledge of the unspeakable corruption that went down in the depletion of the $1.1 billion which Agip-Eni and Shell paid to the Nigerian government for onward transmission to Malabu Oil for the purchase of OPL 245 oil field in offshore Nigerian.
The development comes barely three weeks after the Abuja Division of the Federal High Court ruled that Mr. Adoke could not be held liable for some presidential powers he exercised while the Malabu Oil deal was being perfected between 2010 and 2011.

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