The Federal Government on Sunday responded to a scandal allegedly involving President Goodluck Jonathan, two ministers, a former minister of petroleum and two multinational oil firms. The response, which came in the form of a statement issued by the Minister of Justice and Attorney-General of the Federation, Mr. Mohammed Adoke (SAN), came almost a week after the scandal had first broken.
However, the statement was silent on the claim in the report that the transaction was facilitated by President Jonathan and senior government officials who might have benefitted from the deal.
Global Witness, an international non-governmental organisation that promotes the protection of human rights and the sustainability of natural resources, had alleged in a report that the Federal Government round-tripped a sum of $1.092bn for oil block OPL 245.
The report entitled, “Shell’s obscure payments kill its case for weak US and EU transparency laws”, alleges Nigerian subsidiaries of both Shell and ENI paid $1.092bn (N155bn) to the Federal Government for OPL 245. It further says that senior government officials, at the behest of President Jonathan, then paid the entire N155bn to Malabu Oil and Gas, a company owned by Mr. Dan Etete, a former oil minister under the late General Sani Abacha.
An online medium, PREMIUM TIMES, last week, had stated that the money was later shared among government officials and some private individuals.
But Adoke, in the statement, said the allegation was without basis, adding that the government only paid the role of a “mere facilitator of an amicable settlement between two disputing parties over a long standing dispute with obvious economic implications for the country.” He described reports to the contrary as ““misrepresentations and obvious mischief in reporting the role.”
After its efforts to get government officials to speak on the matter proved abortive, The PUNCH, on Friday, had reported that government was unwilling to comment on the matter.
But Adoke, in the statement, argued that the Federal Government and its agencies should not be dragged into a purely commercial dispute.
According to him, Malabu and other indigenous oil and gas companies were allocated oil blocks which they were expected to develop in partnership with international oil companies as technical partners.
He further explained, “Malabu was allocated OPL 245 in April, 1998 and in accordance with the terms of the grant, it appointed SNUD as its Technical Partner.
“The two companies executed relevant agreements including a joint operation agreement in 2001. Records indicate that Shell Nigeria Ultra Deep Limited took 40 per cent participating interests in the venture in a farm-in- agreement and also signed agreement with Malabu as its technical partner for the venture.”
He stated that although Malabu was issued a licence for Block 245 in April 2001, the same licence was subsequently revoked by the Federal Government on July 2, 2001.
Adoke said that Exxon-Mobil and Shell were invited in April 2002 to bid for OPL 245 despite subsisting contractual agreements between Malabu and SNUD with respect to OPL 245.
The minister said, “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, its technical partner.
“Malabu also contended that the subsequent re-award of OPL 245 to SNUD by the Federal Government was done under questionable circumstances. It then petitioned the House of Representatives Committee on Petroleum to look into the matter.”
He noted that the House of Representatives Committee on Petroleum had found no rational basis for the revocation, reprimanded Shell for its complicity and directed the Federal Government to restore OPL 245 to Malabu, the original allotee.
The minister disclosed, “Malabu also instituted Suit No. FHC/ABJ/CS/420/2003, before the Federal High Court (FHC), Abuja to enforce its claim to OPL 245. Although the suit was struck out by the FHC, Malabu lodged Appeal No. CA/A/99M/2006 before the Court of Appeal, Abuja, Division.
“During the pendency of the Appeal, an amicable settlement was entered into between Malabu and the Federal Government and in compliance with the terms of settlement executed by the Parties on the 30th of November 2006, OPL 245 was fully and completely restored to Malabu in consideration of its withdrawal of the Appeal.”
He stated that the SNUD, which was dissatisfied with the terms of settlement between the Federal Government and Malabu commenced arbitration proceedings against Malabu at the International Centre for the Settlement of Investment Disputes in Washington DC, USA.
Adoke said though several meetings were held between the Presidency, Ministry of Petroleum Resources, SNUD and Malabu to resolve the dispute, no progress was made before the administration of late President Umaru Musa Yar’Adua.
The minister said, “In 2010, when this administration (Jonathan’s) came to power, Malabu again, petitioned the Federal Government to implement the terms of the out-of-court settlement of 30th November 2006 on the basis of which they had discontinued their Appeal.
“Government also took cognizance of the pending cases instituted by SNUD against Federal Government of Nigeria (FGN) and/or Malabu, including Bilateral Investment Treaty (BIT) arbitration No. ARB/ 07/18 pending at the International Centre for the Settlement of Investment Disputes (ICSID Arbitration) to enforce SNUD’s rights to exclusively operate Block 245 as a contractor on the basis of the 2003 PSC between NNPC and SNUD and the financial implications of defending these actions on the public purse and opted for amicable resolution of the dispute.
“To accommodate all these interests, a resolution agreement dated April 29, 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.”
He said that in furtherance of the agreement, SNUD and ENI agreed to pay Malabu through the Federal Government acting as an obligor, “the sum of US$ 1,092,040,000bn in full and final settlement of any and all claims, interests or rights relating to or in connection with Block 245.”
In return, Malabu agreed to settle and waive “any and all claims, interests or rights relating to or in connection with Block 245 and also consented to the re-allocation of Block 245 to the Nigerian Agip Exploration Limited and Shell Nigeria Exploration and Production Company Limited.”
The minister stated, “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.”
He explained that during 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.”
“Government has over time demonstrated its commitment to attract investment in the oil and gas sector of the economy and encourage genuine investors (local and foreign) by creating the enabling environment for their business to thrive. The resolution of the lingering dispute over Block 245 was in furtherance of that objective.”
The Chief Press Secretary to the justice minister, Mr. Ambrose Momoh, on Sunday said he was not in a position to respond to the observation that the press statement did not explain Jonathan’s and Adoke’s specific roles, as well as the role of the Minister of State for Finance, Yerima Ngama, inthe scandal.
He spoke on the telephone with our correspondent. Momoh said the AGF was not in town.
“You want him to respond? You should get him but he is not around. He is not in town at this moment,” he said.