A court in the United Kingdom has dismissed a $1bn bribery suit instituted against oil giants, Royal Dutch Shell and Eni by – the Nigerian Federal Government, Bloomberg reports.

The judge, Christopher Butcher, delivered the ruling at a virtual hearing on Friday, May 22nd, 2020 setting back the long-standing trial on the Malabu oil deal of 2011.

The judge ruled that England had no jurisdiction to try the case as it involves the same essential facts as a separate Italian criminal case.

The ruling is a victory for the oil companies, which have been clouded by accusations in a years-old dispute over exploration rights to a tract in the Gulf of Guinea called Oil Prospecting License 245 that has spread to courtrooms throughout Europe.

The Nigerian Federal Government claims that money the companies paid to acquire the oil exploration licence in 2011 was diverted to bribes and kickbacks.

It says Shell and Eni are partly responsible for the behaviour of Nigerian officials who used a $1.1bn payment to acquire the oil block for personal enrichment. Shell and Eni have denied any wrongdoing.

We maintain that the 2011 settlement of long-standing legal disputes related to OPL 245 was a fully legal transaction with Eni and the Federal Government of Nigeria, represented by the most senior officials of the relevant ministries,

Shell said in a statement.

The Nigerian Government said in its own statement that the Italian criminal case has a completely separate legal basis from the UK civil case and it would seek permission to appeal.

Eni has declined to comment.

The ruling does not affect ongoing Italian criminal proceedings, where Nigeria has a separate legal claim.

The Malabu scam, described as one of the most fraudulent oil deals in the world, involved the payment of $1.1bn by oil giants, Shell and Eni, to the Federal Government accounts in 2011 for OPL 245, said to hold reserves of about 9.23 billion barrels of oil.

The OPL 245 was alleged to have been bought by the then Minister of Petroleum Resources, Dan Etete under suspicious circumstances in 1998.

Etete was alleged to have bought it for a fraction of its actual value. However, the oil licence was revoked by the new President Olusegun Obasanjo administration and reallocated to Shell.

During the administration of Jonathan in 2011, the then Attorney-General of the Federation, Mohammed Adoke (SAN), brokered a deal for the sale of the same oil bloc, acting as a middleman between Shell and Eni on the one hand, and Etete’s company, Malabu, on the other hand.

Shell and Eni were said to have paid about $1.3bn for the OPL 245, which was paid into two escrow accounts owned by the Federal Government. However, Adoke was alleged to have transferred over $800m to Etete who, in turn, transferred part of the money to government officials.

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.