THE MALABU DEAL SAGA

Recently, an Italian court ruled that the executives of Shell and Eni should go on trial over allegations of bribery in the OPL245 purchase from Nigeria’s Malabu Oil & Gas Ltd in 2011. How much do Nigerians know about the nitty-gritty of the scandal? THE SHIFT SOCIETY, a Nigerian civil group promoting transparency and human rights, offers a bird’s eye view on the history, issues and dramatis personae in probably the most problematic deal in the history of the country’s oil industry.

In April 1998, the government of Gen. Sani Abacha awarded an Oil
Prospecting Licence (OPL) to Malabu Oil & Gas Ltd for Block 245. The owners ofMalabu were listed as Kweku Amafagha,
Mohammed Sani and Hassan Hindu.
Premium Times, an award winning investigative website, later revealed that Chief Dan Etete, the then Minister ofPetroleum under Abacha, was the “Kweku”,
Mohammed Abacha, son of the former Head of State, was the “Mohammed Sani” and Hassan Hindu was the wife of Alhaji Hassan Adamu, who was then Nigeria's Ambassador to the US.

Malabu Oil Ltd made an advance payment of $2m on the concessionary $20m signature bonus for the oil block. Meanwhile, Malabu Oil Ltd and Shell Nigeria Ultra Deep Limited (SNUD), a special vehicle of Shell, signed an agreement for the block and Malabu Oil was to transfer 40% interest to SNUD. In 2001, along the line, Gen.Abacha died. Then a new President and commander in Chief came onboard after elections in a new democratic dispensation. Chief Olusegun Obasanjo was the new President and commander in chief as a civilian president. He, immediately and without hesitation revoked the licence and invited Shell to bid

for it. Shell, however, got it and went into a production sharing agreement with the Nigerian National Petroleum Corporation (NNPC).

Shell agreed to pay a new (whooping sum) signature bonus of  $210m — the biggest ever in Nigeria's history then. The oil company paid $1m of the
amount to the Federal Government then and paid the balance of $209m into an escrow account, jointly operated by it and the Federal Government. This was in apparent anticipation of litigation by Malabu Oil Ltd over the revocation.

The House of Representatives, then, held a public hearing and asked the Federal Government to return the licence to Malabu. The, then, president Obasanjo's led federal government refused, following which Malabu Oil Ltd headed for the courts. It lost but later went on appeal. Eventually, the Federal Government buckled and agreed to settle out of court. It was then agreed that OPL 245 should be returned to Malabu Oil Ltd as the rightful owners. However, Shell kicked and filed an arbitration case against Nigeria at the International Centre for the Settlement of International Disputes (ICSID), an organ of the World Bank, claiming not less than $1.5 billion from Nigeria for alleged breach of contract.

When Obasanjo's successor, Alhaji Umaru Musa Yar'Adua came to power in 2007, he set up an inter-ministerial committee headed by Chief Michael Aondoakaa, his Attorney-General, to look into it. The committee’s recommendations were not implemented as Yar’Adua battled ill-health for most of his tenure. He died in May 2010.

When Dr. Goodluck Jonathan assumed office, Malabu brought up the 2006
agreement, also called “consent judgement”. Mr. Mohammed Bello Adoke, the then Attorney-General, reportedly advised Jonathan to honour the agreement
so that progress could be made on the potentially lucrative oil block. In 2011,

Malabu decided to sell the block but was no longer ready to discuss with Shell because of “betrayal”. Eni of Italy, which already owns the contiguous OPL 244,
stepped in. After negotiations, a price of $1.1bn was agreed with Malabu by
Eni/Shell. And the deal was done. Eni/Shell paid a total of $1.3bn ($1.1bn to Malabu to buy the block, and $210m as “signature bonus” to the Federal Government).

So where was the scandal? Rather than pay directly to Malabu, Shell/Eni paid to the JP Morgan's account of a third party, FGN, who then transferred part of the payment to Malabu. Global witness and Finance Uncovered that anti-corruption organisations based in the UK, would later reveal that leaked emails from
the executives of Shell and Eni suggested they knew that bribes were going to be
paid from the deal. To avoid the bribes being traced to them, Shell and Eni

allegedly decided to pay directly to FGN
for onward disbursement. That is the reason for the indictment of the oil executives.
Officially, Eni/Shell insist they paid $1.3bn to FGN, and not Malabu, for OPL 245.

Any other thing we need to know?

Dan Etete had been convicted of money laundering in France in an unrelated deal,
but his involvement in OPL 245 transaction raised the eyebrows of observers who then went to search for possible wrongdoing. What happened to OPL 245?

All is fine. Oil and gas discoveries had been made in Etan and Zabazaba fields in 2005 and 2006 respectively. Eni continues prospecting. It later awarded a $5.42bn contract to Italian engineering, construction and drilling contractor, Saipem,
for chartering, operations and maintenance
for a Floating Production Storage Offloading tanker. Production is expected
to start in 2020.

THE BIG QUESTION, THEN, WAS WETHER $1.1bn ACTUALLY DIVERTED???

Most commentators on the payment of $1.1bn to Malabu by Shell/Eni in the OPL 245 deal use the word “diversion” - suggesting that the money belongs to the Nigerian government. Infographics have been used to depict how the money could have gone into social services, such as health and education. As plausible as this sounds, it is not exactly correct. Yet this notion still generates the most public anger about the deal.

Having allocated OPL 245 to Malabu and collected $210m signature bonus, the Federal Government no longer had a stake in the block. However, the federal government would still make money in taxes, royalties and levies when oil production actually starts.

Rtrd. Gen. Theophilus Danjuma’s Sapetro subsequently sold 45% of OPL 246 to CNOOC of China for $1.7bn and nobody said the Federal Government lost $1.7bn or that the proceeds should have gone into social services. For example, if you buy a plot of land from government for N1m and resell it for N3m, the profit is yours.
Government could still make money from the land use charge, property tax and other levies.

BBNAIJA 2018: JONATHAN'S EX-AIDE, OMOKRI REACTS TO BAMBAM, TEDDY A’s SEX IN THE TOILET

Reno Omokri, former aide to ex-President Goodluck Jonathan on Wednesday reacted to the sex episodes in the Big Brother Naija 2018 reality show.

Omokri wondered why housemates caught having sex in the toilet are been referred to as stars.

In a tweet, the former presidential aide cautioned Nigerians against replicating everything from the Western world.

He wrote, “When I was a child, only animals had intercourse in the open for all to see. Now I am an adult, Nigerians call people who publicly have intercourse in a toilet, stars! If they are stars, it must be very dark over Nigeria! We have a culture. Not everything from the West is good!”

Their escapade was revealed at a time when Miracle said all housemates have had sex, especially in the toilet, and that is being the real reason for the missing condoms in the house.

CBN TO APPROVED CRYPTOCURRENCY & BLOCKCHAIN TECHNOLOGY

Sequel to the setting up of an industry committee to look into (and articulate) a road map for Blockchain & Cryptocurrency regulation, the Central Bank of Nigeria (CBN) has reiterated that it will not hinder the use of digital currencies in Nigeria.  

The apex bank, in a recent brief with industry experts, stated that an agreement has been reached to formally adopt its use in Nigeria.  

A call to the Fintech Association of Nigeria confirms this and it is expected that a regulatory framework for same will be made available soonest. 

Technology disruptions will continue to drive engagements in the financial sector and this feat by the Central Bank will go a long way in enhancing Fintech initiatives in the industry.

$2.1BN ARMS DEAL: I WILL SPEAK SOON - Labaran Maku

Former minister of Information, Mr Labaran Maku, said he would soon air his “views about everything that is going on” on the $2.1bn arms deal scandal involving ex-National Security Adviser, Col. Sambo Dasuki (retd).

Labaran Maku in the same vein faulted the planned N17 billion airport project by Governor Tanko Al-Makura of Nasarawa State, describing it as an avenue to steal and warned commercial banks not to give N26billion loan to the governor.

“If the governor insists on an airport, what Nasarawa State’s people need now is an airstrip, and not an airport of N17 billion.

“I don’t want to comment on this administration now because I was in the previous government as minister of Information and our voice was all over the nation. Decency requires that I keep quiet and let Nigerians hear other voices. That doesn’t mean I will not say anything, but it is virtually too early for me as a former minister of Information to begin to talk about what is going on at the moment.

“So it is not correct; when you have spoken so long and people have heard your voice, you also withdraw and hear others. I have my views about everything that is going on now. When the time is due, when I have respected public decency, waited and have heard some other Nigerians, I will make my views known.

“But for now, it is too early for me to say anything. The processes that are going on are in the full glare of Nigerians and what I will say is that the media should be very careful. That’s my advice and I will not say anything else.

“What happened in Nasarawa State between April 11 and 13, 2015 was worse than June 12, 1993 presidential election. The situation is now worse that even admission into Nasarawa State University was conducted on ethno-religious grounds. Ironically, this is a state where Muslims, Christians and traditional worshippers are equal in number.”