When the case broke out around 2001, many stakeholders in the upstream sector of the Nigerian economy thought it was another storm in a teacup that would soon evaporate and die. But die, it has not, 12 years after. Rather than wane, the messy oil deal, like a phoenix, keeps rising from the ashes of one presumed death stage, climbing, with renewed vigour, to another pedestal. As it does, it bares more poisonous fangs that threaten to consume those found to have a hand in the complicity that daily exposes the rot in the oil and gas sector.
The matter at issue is the tangled case of the massive offshore oil block, with Oil Prospecting Licence (OPL) 245, which was originally awarded to Malabu Oil and Gas Limited, but sold to Shell, the Royal Dutch oil giant, and ENI, an Italian company, in some foggy circumstances.
Industry sources revealed that OPL 245, a deep water acreage in the Gulf of Guinea, has the capacity to produce staggering 9.23 billion barrels of crude oil, not to mention the equally huge deposit of gas in the block. This quantum of crude, The Economist of London, said in his June 15, 2013 edition, is enough keep the whole of Africa running for at least seven years. In its own post on Wednesday, July 24, Reuters said the same quantity of deposits was “more than enough to keep China running for two and a half years.” The House of Representatives ad-hoc committee scrutinizing the dirty tactics employed in selling the oil-rich block to Shell says the huge reserve could fetch Nigeria “well over a trillion dollars. Despite its rich deposits, especially being one of the richest oil blocks in the country, the committee noted that OPL 245 was grossly underestimated at 447 million barrels officially recorded for it.
Genesis of trouble
The storm over OPL 245 began to gather almost at its birth in 1998, during the jackboot regime of General Sani Abacha, when Dan Etete, the then Minister of Petroleum, awarded two oil blocks to Malabu Oil and Gas Limited, a company he had 30 percent interest. The company got the award five days after it was born (April 29, 1998) with a “signature bonus” of $20 million, out of which it was only able to pay $2million.
While there was no problem with the first oil block, OPL 214, the storm over the second, OPL 245, actually began to gather two months after Malabu’s registration. That was on June 8, 1998, when General Abacha died. The body of the late Head of State couldn’t have achieved full rigor mortis when deadly intrigues started dogging every step of OPL 245. Abacha’s death, and subsequent detention of his son, Mohammed, paved the way for some secret schemings and under-the-table deals in which his (Mohammed’s) shares were taken over by Etete, through his crony, and one Alhaji Aliyu Mohammed Jabu.
This illegal acquisition provides the fuel that stokes the current fire over OPL 245.
Malabu Oil and Gas was incorporated as a limited liability company at the Corporate Affairs Commission, CAC, on April 24, 1998, by three persons. They are Kweku Amafagha, who, as the surrogate of Chief Dan Etete, the sitting Minister of Petroleum at the time, was shareholder and director; and Mohammed Abacha, son of the then Head of State, General Sani Abacha, who used the name Mohammed Sani Ahmed (as shareholder and director). The other person was Hassan Hindu Wabi, wife of Hassan Lawal Adamu, the then Nigerian Ambassador to the United States of America, also the Wakilin Adamawa, who reportedly fronted for her husband (as shareholder only). One Alhaji Aliyu Mohammed Jabu allegedly represented Hindu on the board as director.
The company’s share capital was N20 million, divided into 20 million ordinary shares at N1 each. The shareholdings were distributed as follows: Mohammed Sani-50 percent or 10 million ordinary shares, Kweku Amafagha-30 percent or 6 million ordinary shares, and Hassan Hindu-20 percent or 4 million ordinary shares.
The Obasanjo Factor
When Chief Olusegun Obasanjo became President in 1999, ICON learnt, he revoked many oil prospecting licences. But contrary to the expectations of many stakeholders in the upstream sector, who had thought he would not spare anything connected to General Sani Abacha, his tormentor-in-chief, he spared OPL 245, but with a caveat: that Mohammed Sani (or Mohammed Abacha) must cease being a shareholder and director. Consequently, Etete, through his crony, Kweku Amafagha, and Jabu, took over Mohammed Sani’s 50 percent, sharing the stakes at 20 and 30 percent apiece.
That transaction brought Jabu’s shares to 50 percent. And shortly after the transaction, ICON further learnt, Jabu and Amafagha (representing Etete) offered to sell Jabu’s original 20 percent and the 30 percent he illegally acquired from Mohammed Sani’s stake to PECOS Energy Limited for a consideration for the payment of US$5million. PECOS Energy Limited is owned by Otunba Oyewole Fasawe, a mutual friend of Obasanjo, and his erstwhile deputy, Atiku Abubakar.
Once the deal was sealed, Rasky Yemwenre Gbinigie, acting as the company secretary, went to the Corporate Affairs Commission, CAC, on May 31, 2000, to file for the alteration of the directors of Malabu Oil and Gas Limited. He supported the claim with a board resolution dated March 6, 2000, that stated that Seidougha Munamuna (alleged to be another lackey of Etete), and PECOS Energy Limited had been allotted 10 million ordinary shares each. Munamuna and Jabu signed the resolution.
The said resolution was couched as follows:
“That owing to the new share holding structure in the company and the removal of the name of Alhaji Aliyu Mohammed Jabu from the membership register, Otunba O. Fasawe (representing Pecos Energy Limited) be and is hereby appointed Director of the company with effect from 6 March, 2000 and Mr. Seidougha Munamuna retains his seat as director and chairman of the company.”
Of course, Mohammed Abacha was oblivious of all these deals because he was in detention. He never divested his shares neither did he give any notice of doing so. But once the deal was sealed, share certificates were issued to PECOS Energy Limited and Munamuna, with numbers 0000026 and 0000027 respectively.
February 23, 2001, was the big payday for Jabu. A draft of US$5million from Standard Chartered Bank, 37, Gracechurc Street, London EC 3V OBX, with number 026002561, was issued to him via a company, First Monel Inc. Five days after the payment was made to him, he sent his resignation, as a director of Malabu Oil and Gas Limited, all the way from London.
Double Trouble
Owing to the enormity of OPL 245, and perhaps, coupled with the fact that it lacked the needed expertise to prospect oil in the block, PECOS Energy Limited invited Shell Nigeria Ultra Deep Limited, SNUD, a local subsidiary of the Royal Dutch oil giant, to become technical partners of Malabu Oil and Gas Limited. Shell obliged and deposited US300 million while PECOS undertook to fund the management and operations of Malabu.
But trouble would soon shoot out from a higher realm as the then Obasanjo and Atiku Abubakar, his deputy, went to war over the widely reported tenure extension plot of the former president, popularly known as 3rd Term. Fasawe, chairman of PECOS, was caught in the crossfire. Convinced that the PECOS’ boss was sympathetic to Abubakar’s cause, Obasanjo declared him personal non-grata, and did everything to make life miserable for him.
First, he unleashed the Economic and Financial Crimes Commission, EFCC, then under Malam Nuhu Ribadu, on him. The anti-graft agency brought out its fangs in full and hunted down Fasawe like game. Just like the agency routinely did to perceived enemies of the president at the time, its operatives promptly threw him into detention.
Still, President Obasanjo was not done. In 2002, he revoked Malabu’s OPL 245, and put the block out to bid. Shell Nigeria Ultra Deep Limited, SNUD, won the bid with its offer of US$ 210 million. Although the winner was expected to pay the US$ 210 million as a prerequisite for signing the production-sharing contract with the Nigerian National Petroleum Corporation, NNPC, it paid only US$1 million.
Expectedly, that award elicited legal fireworks. While Malabu Oil sued the Federal Government, PECOS petitioned the 6th National Assembly. The House of Representatives conducted an investigation into the matter, including a public hearing. In the end, it churned out a resolution, asking the Federal Government to return the contentious block to its rightful owners-Malabu Oil and Gas Limited.
Obasanjo complied, albeit partially, because a source told the magazine that, secretly, the then president ordered that Fasawe and his PECOS be knocked out of the equation. Consequently, on December 18, 2006, Malabu’s shareholding structure was, again altered to favour Munamuna, and one Joseph Amaran. Both men were allotted 50 percent equity each.
The duo were said to be two sides of the same coin. “They were fronting for the former Minister of Petroleum,” the source said. Like in the first alteration, Gbinigie, the company secretary/legal adviser, effected the changes at CAC. By this action, Etete, according to a petition by PECOS and Mohammed Sani, now became the sole owner of Malabu Oil, having allegedly acquired 100 percent shares by proxy. To establish the legality or otherwise of what was really happening, the law firm of Rickey Tarfa, a Senior Advocate of Nigeria, SAN, on August 31, 2007, conducted a search at the CAC on the alterations that Gbinigie made in the Memorandum and Article of Association of Malabu Oil and Gas Limited.
The law firm observed that “Copies of the Memorandum and Article of Association, copy of certificate of incorporation (were) not found in the file, so we could not locate nor verify the names of the first directors of the company and could not verify the Articles of Association to ascertain the mode of payment for the shares and other issues.
“We also observed that there was an internal memo by Corporate Affairs Commission (on) the propriety of the allotment of shares in the company in respect of the allotment of shares to Mr. Joseph Amaran.”
Based on its findings, Rickey Tarfa & Co. wrote the Company Secretary of Malabu Oil and Gas Limited, informing him that its client, Mohammed Sani, had not divested himself of his 50 percent stake in the company’s equity. Therefore, the company should maintain the man’s original shareholding in all the company’s documentations. On November 6, 2008, the firm also alerted the CAC on the alterations, declaring that its client never divested himself of his original shares in the company, neither had he authorised anyone to divest him of the stake.
With the re-award of OPL245 to Malabu Oil, Shell sought arbitration abroad while Malabu wrote to Mohammed Adoke, the Minister of Justice and Attorney General of the Federation, for intervention. Mohammed Sani also ran to a Federal High Court in Abuja. All these resulted in the signing of an agreement, on April 29, 2011, which mandated all parties in the crisis to withdraw their cases in the various courts. Shell not only consented to give up its lawsuits, it, in collaboration with ENI, an Italian company, also agreed to pay US$1.3 billion to Malabu for the latter to give up the block.
As part of the two-tier deal, once Malabu signed off its right to the oil field, the government would deduct its unpaid signature bonus and remit the remainder-about US$1.1 billion-to the indigenous oil firm. Consequently, all cases, except that of Mohammed Sani which is still pending at the Federal High Court, Abuja, were withdrawn. With Sani’s outstanding matter, the original status of Malabu Oil shareholding should normally subsist under the law.
Adoke’s letter
On May 25, 2010, the Justice Minister wrote President Jonathan, asking for authorization to serve as Obligator to resolve the issues among all parties involved in the OPL 245 saga.
In the letter submitted to the president’s office the following day, Adoke noted, among other things, that it “smacks of sharp business practices on the part of SNUD to bid for a Block for which it had a subsisting technical agreement with another company. Cognizance must also be taken of Government’s underlying policy decision of encouraging the participation of indigenous oil and gas companies in the upstream sector of the oil industry. The policy was not designed to encourage international oil companies who are already major players in the industry to take over concessions granted to indigenous companies who are small/minor players in the industry at the moment.”
“In view of the foregoing,” Adoke concluded, “it is necessary for government to give effect to the terms of the Settlement and Agreement with Malabu.”
Very well. It’s just that what happened later leaves much to be desired. This is because rather than pay the US$1.1 billion accruing to Malabu (as originally constituted) for waiving its rights on OPL 245, Shell and its partner, ENI, Reuters reported in its post on Wednesday, paid $1.3 billion into a government account and a $207 million signature bonus. Reuters further reported that Shell subsidiary paid the signature bonus while an ENI subsidiary paid the $1.1 billion balance. All these were done without recourse to the majority shareholders who own 70 per cent.
Questions. More Questions.
The rather opaque manner in which the OPL 245 transaction has been handled so far has thrown up a plethora of questions in many quarters. Apart from the court cases it has generated, it has also activated high-power investigations in the United Kingdom where the London Metropolitan Police have started scrutinizing whether the sleazy $1.3 billion oil block scam has fuelled money laundering into their system. The influential Wall Street Journal quoted a spokeswoman for London Police as saying that the “Metropolitan Police’s Proceeds of Corruption Unit is investigating allegations of money laundering related to the oil block.”
Back home, the EFCC has investigated and, indeed, compiled a damning interim report based on a petition filed by Mohammed Sani’s lawyers, A. A. Umar & Co. dated January 12, 2012. Months ago, the House of Representatives raised the red flag on the way the rich oil block was disposed.
In its report, the House ad-hoc committee, headed by Hon. Leo Ogor, the Deputy House Leader, expressed disgust at what it termed “the manipulation by SNUD (Shell Nigeria Ultra Deep Limited) of the Indigenous Policy” which it said was “was a very serious issue of concern to the Committee.” It was particularly dismayed that despite that manipulation, Shell started the business by issuing a dud cheque of US$17, 960, 000, as “balance of for the Signature Bonus after signing a technical and farm in agreement with Malabu Oil and Gas Limited.”
The Reps also wondered why the oil block with a reserve of over 9.23 billion barrels of crude, excluding its huge gas deposits, was grossly under-estimated at 447 million barrels, a quantity that, it says, falls 20 times below the actual value. “Could this be a mistake or was it intentional?” the Reps asked pointedly in the report. “ Could this also be the reason SNUD wanted the Block 245 at all cost?”
While noting, on Page 64 of the 70-page report, that the Federal Government never gave any reason for the revocation of Malabu’s rights to OPL 245, the committee said it “could not establish why FGN (Federal Government of Nigeria) insisted that Malabu Oil and Gas Company Limited should pay a signature bonus of $210,000,000.000 bidded by SNUD, (the technical partner to Malabu) with a Farm in agreement in respect of block 245 with Malabu in place, instead of the $20,000,000.000 of which the sum of $2,040,000 has already been paid to the FGN…”
After adding up all the discrepancies by Shell in the transaction, the Reps. recommended that, “Shell Nigeria Ultra Deep Limited (SNUD) be censured or reprimanded by the House for its lack of transparency and full disclosure in its bid to acquire OPL 245.”
On the illegal alterations made in the Memorandum and Article of Association of Malabu Oil and Gas Limited, the committee said the “Police should take over the ongoing investigation on the matter of forgery and alteration of documents indicating some Malabu Oli & Gas Ltd directors resigned their positions or transferred their appointments or shares without their authorization, and indicate prosecution of any person indicted.”
In its interim report, the EFCC team that investigated the allegation of “Corruption, forgery, uttering false forged document, criminal misappropriation and money laundering”, recommended that Rasky Gbinibie, the company sectary, should be invited “to explain the circumstances that led to the filing of various documents in the Corporate Affairs Commission.”
Further more, the EFCC team recommended that Chief Dan Etete, Hassan Adamu, Alhaji Aliyu Mohamed Jabu, Amaran Joseph, Seidougha Munamuna and Hassan Hindu should be invited to explain their roles in the Malabu Oil saga. The same goes for the principals of the Department of Petroleum Resources, Shell Nigeria Exploration and Production Limited, Nigeria Exploration Limited, Mr. Casula of ENI AGIP, Mr. John Coplestone of Shell and Mr. Edna of International Consulting Limited of Geneva.
Etete and the law
To Chief Dan Etete, this might not be a totally strange road to walk. He had, in 2007, faced trial in France. A French court, had, on Wednesday, November 7, 2007, sentenced the former Minister of Petroleum, in absentia, to three years in prison and a fine of 300,000 euros (USD440, 000) for money laundering. The court also issued an arrest warrant for the man who served as oil minister under General Sani Abacha from 1995 to 1998, and currently lives in Britain.
According to Petroleumworld.com, the Paris court also convicted Etete of using 15 million euros of fraudulently acquired funds to purchase choice properties in 1999 and 2000. These included a chateau in northwest France, an apartment in Paris, and a luxury villa in the chic Paris suburb of Neuilly.
But the former oil minister didn’t go down alone. His accomplice, Richard Granier-Defferre, a French businessman, also got 12 months in jail and a fine of 150,000 euros for complicity in the crime. Etete was also ordered to pay 150,000 euros to Nigeria in compensation for moral prejudice and 20,000 euros in fees.
Adoke’s Defence
During its investigation, the House of Representatives ad-hoc committee on the Malabu Oil transaction had invited 18 top public officials. They all had their days at the House, explaining what they knew about the transfer of $1.1billion into the account of the oil services company, shortly after two multinational oil concerns, Shell and ENI, had paid the money into government coffers. The Justice Minister was one of them.
He, however, made headline news, upper week, when, in response to a letter that Global Witness, a London-based non-profit anti-corruption organization, wrote to Nigeria’s Minister of Finance and Coordinating Minister for the Economy, Dr. Mrs. Ngozi Okonjo-Iweala, requesting her to investigate her ministry’s officials over funds received in the sale of OPL 245.
Perhaps, owing to the intense public interest the matter was generating, Adoke, on May 20, 2013, wrote to Global Witness, saying the transaction followed due process and there was no need investigating anyone.
In paragraph 6 of his response, the Justice Minister said:
“…I wish to reiterate that the settlement relating to OPL 245 did not breach the Constitution of the Federal Republic of Nigeria 1999 and/or any extant law. The transaction was completely transparent and received the approval of relevant authorities and persons. You may wish to note that the House of Representatives of the Federal Republic of Nigeria had instituted a probe into the transaction and at the end, they were satisfied that there was no infraction of the Constitution or any other Nigerian law.”
Enraged by the assertion that the House of Representatives had ruled that there was no infraction committed in the messy Malabu Oil transaction, even when the House Committee was yet to lay its report before the House, the Reps, on Tuesday, July 16, summoned Adoke to come and shed more light on his assertion.
On Wednesday, July 17, the minister rolled out a rebuttal, denying that he ever made any reference to any report by the House committee.
Slamming the media on “the misrepresentations and obvious mischief in reporting the role of the Federal Government, its agencies and officials in the settlement of the dispute,” the minister, in a statement issued by Ambrose Momoh, his chief press secretary, denied ever making any “reference to any report of the committee, as none had been made available to him.”
Insisting that the House Committee was satisfied with his testimony before it, the minister declared that, “the alleged report and controversy it has generated is a calculated attempt to bring the office of the Attorney-General and relevant agencies of government to infamy.”
Still, Adoke would not quit. He said the outrage against his office was fuelled by his refusal to “compromise his office in order to satisfy the demands of certain interests and individuals.” Promising to confront “those secretly beating the drums for masquerades dancing in the market square” at the appropriate time, the minister further stated that “We know those who have compromised their positions in order to author the alleged report and their theatrical display for public gallery.
“…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?”
Restating that the Federal Government merely acted as a “facilitator” to engender peaceful resolution of the matter between Malabu Oil and Gas Limited and Shell Nigeria Ultra Deep Limited, Adoke wondered why the matter was generating so much controversy when the courts were the “appropriate venue for the ventilation of such disputes between share holders (if any).” He, then, pledged to submit himself to any investigation that would unravel the truth in the matter.
If Adoke thought Global Witness would be amused by his rebuttal, he was greatly mistaken. The organization, Tuesday, July 23, said it stood by its story and pushed the minister’s letter to the public domain (see Box).
It would have been easier for the proverbial camel to pass through the needle’s eye than getting Chief Dan Etete to comment. All our efforts to get his reaction were deadlocked. The same thing applies to Shell. However, Reuters quoted a spokesman of the company as saying that it had purchased the block from the government, making no payment to Malabu, and that it acted transparently and in accordance with Nigerian law.’
Just as well. However, Reuters quoted ENI as having declined comments but recalled that it told shareholders in May that the company did business with the government and not Malabu.
Well, as things are, it seems there is no end yet in sight to the sleazy oil deal. The big question remains: who diverted the money that rightly belongs to the original owners of Malabu Oil and Gas Limited?
Source: Sun News
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