‘How OPL 245 was transferred’

Obasanjo
April 15, 2022

Former President Olusegun Obasanjo approved the out-of-court settlement between the Federal Government and Malabu Oil & Gas Limited over the OPL 245 dispute in 2006, it was learnt yesterday.

The approval formed the basis of the transfer of OPL 245 from Malabu to Shell and Eni in 2011 for $1.1 billion.

Obasanjo had revoked the oil block and awarded it to Shell in July 2001 but agreed to return it to Malabu in 2006 following six years of litigation.

In the final resolution agreement approved by Obasanjo, the Federal Government asked Malabu to pay a signature bonus of $210 million.

A copy of the request for approval sighted by our reporter yesterday, with reference number HMSPR/DPR/PI/LD/245, was made by Minister of State for Petroleum Resource, Dr Edmund Daukoru on October 3, 2006.

Obasanjo gave approval the same day. He simply wrote on the memo: “Minister of State – Approved. OO. 03/10/06.”

In 2011, the out-of-court settlement was implemented by the Federal Government and Malabu subsequently relinquished interest in OPL 245 and the international oil companies acquired the block in a deal that has led to a criminal trial over alleged corruption by the Italian government.

All the defendants were discharged and acquitted by the Court of Milan in March 2021 after nearly three years of trial.

Nigeria is now seeking the award of $1.7 billion against JP Morgan Chase Bank for allegedly failing in its Quincecare duty when it transferred $810 million to Malabu from the OPL 245 sale proceeds.

 

The government argued that the bank ought to have known that it was “a corrupt and fraudulent scheme” and should have withheld the payment.

 

Nigerian lawyers are specifically accusing former Attorney-General Mohammed Bello Adoke, of corruption, which he has always denied the allegations.

 

In a letter addressed to Malabu and Etete dated December 2, 2006, Dr Daukoru, conveyed presidential approval of the settlement.

 

Before the out-of-court settlement, a document dated November 3, 2006, revealed that Daukoru brokered a similar settlement agreement with Malabu on behalf of the Federal Government.

 

The letter, with the title: “Malabu Oil and Gas Limited – out-of-court settlement in respect to OPL 245”, read: “The above subject refers and we are delighted to convey to you that the President of the Federal Republic of Nigeria and Commander-in-Chief of the Armed Forces having concluded a review of your legal claims for the return of the oil block 245 has graciously approved and directed as follows:

 

  • That The Federal Government of Nigeria is amenable to an out of court settlement of the claims comprised in the legal proceedings commenced by Malabu Oil and Gas Ltd and consequently has agreed to settle your legal claims for the return of the oil block constituted as OPL245. The said oil block 245 (OPL245) shall from the date thereof and with immediate effect, be returned to MALABU OIL AND GAS LTD with full and total reinstatement of all its rights thereof.

 

  • Any and all previous decisions inconsistent with or purporting to deprive MALABU OIL AND GAS LTD of its rights over the totality of the concessions in the said OPL245 shall stand absolutely and totally rescinded as if they had never been made.

 

  • MALABU OIL AND GAS LTD shall immediately upon the receipt of this letter forthwith withdraw, discontinue and terminate all and every legal proceedings concerning OPL245 initiated and or being maintained by Malabu against the federal government of Nigeria in respect of Oil Block OPL 245.

 

  • MALABU OIL AND GAS LTD shall be required to and shall pay a new signature bonus of United States Dollars Two Hundred and Ten Million Dollars (USD210 million) but the payment of USD210 million Dollars shall be less than the sum of Two million Dollars (USD) previously paid into the coffers of the federal government of Nigeria in respect of an alternative oil block. The fiscal terms of the 2005 PSC shall apply to this restoration. Malabu to source its own technical partners and meet the conditions of the award within 90 days of this award.

 

  • As part of the settlement process the Federal Government of Nigeria is resolved to and has decided to award SHELL Nigeria ultra deep Ltd (Shell) a present concessionaire an alternative oil block with comparable potential and hydrocarbon prospectivity. This information was by a letter dated 1st of December 2006 conveyed to (Shell) Ultra Deep Ltd.

 

  • Malabu Oil and Gas Limited shall be at liberty to exercise all rights incidental to and consequent upon the return of the oil block to it and shall be free to assign, pledge or deal in any way with its restored rights in OPL 245, in whole or in part to any 3rd party subject as always to the operative laws of Nigeria including but not limited to obtaining all approvals permit and appropriate consents necessary.

 

  • Be advised further that the meeting scheduled to be held among concerned parties hereto, and advised to Shell by letter referenced HMSPR/TA/007 and dated 1st Dec 06 shall hold shortly and deliberations thereat may be availed you.”

Subscribe to our Newsletter

* indicates required

Intuit Mailchimp