The transfer of Oil Prospecting Licence (OPL) 245 after a 2006 out-of-court settlement between the federal government and Malabu Oil & Gas Limited got the approval of former President Olusegun Obasanjo, new documents have shown.

The approval of the deal by the then president thereafter led to the handing over of the asset by Malabu to Shell and Eni in 2011 for $1.1 billion. THISDAY recalls that the federal government had revoked the oil block and awarded it to Shell in July, 2001, but later agreed to return it to Malabu in 2006, following six years of litigation.

Malabu was then asked to pay a signature bonus of $210 million as against the concessionary $20 million granted by the Sani Abacha government in 1998.

But the implementation of the settlement began in 2011, prompting Malabu to eventually relinquish interest in the oil block.

Nigeria is now seeking the award of $1.7 billion against JP Morgan Chase Bank for allegedly failing in its duty of care when it transferred $810 million to Malabu from the OPL 245 sale proceeds. According to the federal government, the bank ought to have known that it was, “a corrupt and fraudulent scheme” and should have withheld the payment.”

Although he has always denied any complicity, lawyers to Nigeria insisted that the then Attorney General, Mr. Mohammed Adoke, had a case to answer. They maintain in the British court that Obasanjo granted a media interview denying knowledge of the 2006 out-of-court settlement.

But in a letter addressed to Malabu and Etete dated December 2, 2006, by Obasanjo’s Minister of State for Petroleum Resources, Edmund Daukoru, showed that a presidential approval of the settlement was conveyed and that there were agreements between Malabu and the government.

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,” part of the letter titled “Malabu Oil and Gas Limited – out-of-court settlement in respect to OPL 245,

read.

In addition, it noted that Malabu Oil and Gas Ltd shall be required to and shall pay a new signature bonus 210 million) but the payment of $210 million less the $2 million previously paid into the coffers of the federal government of Nigeria in respect of an alternative oil block.

The fiscal terms of the 2005 Production Sharing Contract (PSC), it stated, shall apply to the restoration while Malabu was to source its own technical partners and meet the conditions of the award within 90 days of the award.
It continued:

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 prospectively. 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.

A rash of other documents further showed that before the out-of-court settlement, Daukoru had brokered a similar settlement agreement with Malabu on behalf of the federal government.

Last month, Adoke had written the current occupant of the position, Mr Abubakar Malami, absolving himself of any complication in the case instituted by the federal government against American Bank, JP Morgan Chase.

In a letter written by his lawyers, Paul Erekoro (SAN), among others, Adoke noted that the federal government’s argument that he contacted JP Morgan repeatedly and sent an email using the mail of Aliyu Abubakar’s shell company, was false.

Adoke noted that allowing unverified information to be presented before the court, to wit that he and Dan Etete committed the offence of

money laundering by facilitating the payment of the funds to Etete and Malabu Oil & Gas Limited through the deposit account,

remained baseless.

Justin Nwosu

Justin Nwosu is the founder and publisher of Flavision. His core interest is in writing unbiased news about Nigeria in particular and Africa in general. He’s a strong adherent of investigative journalism, with a bent on exposing corruption, abuse of power and societal ills.