Abubakar Malami, attorney-general of the federation (AGF) and minister of justice, wants court cases related to OPL 245 terminated by the federal government because the prospects of a judicial victory are slim, TheCable can report.
In a memo to President Muhammadu Buhari,
Malami advised that the termination of the cases will allow the country enjoy
the economic benefits of the controversial oil block while fossil fuels are
still in vogue.
He said the dispute and associated litigation
has brought negative economic consequences for Nigeria “particularly in terms
of foreign exchange earnings, loss of Tax income and Royalty payments”.
OPL 245 is believed to be Nigeria’s most
endowed oil block but its development has been stalled since Buhari came to
power in 2015.
His administration has been pursuing a series
of litigation home and abroad against Royal Dutch Shell, Eni/Nigeria Agip
Exploration (NAE), Shell Nigeria Ultra Deep (SNUD) Ltd, and Shell Nigeria
Exploration Company (SNEPCO) — as well as Mohammed Bello Adoke, former AGF,
over allegations of fraud and corruption in the OPL 245 deal. They all deny the
charges.
In 2011, Shell and ENI paid $1.1 billion to
acquire 100 percent stake in OPL 245 after Malabu, the original allottee,
relinquished its interest in the acreage — but foreign anti-corruption
campaigners alleged that the transaction was shrouded in corruption.
The federal government pursued both criminal
and civil cases and has lost in foreign jurisdictions but the prosecution has
continued in Nigeria using the same evidence that failed abroad.
The cases in Nigeria are being prosecuted by
the Economic and Financial Crimes Commission (EFCC).
‘A SERIES OF
LOSSES’
In his memo dated 6 February 2023, the AGF
reminded Buhari of the string of losses Nigeria has suffered over the years in
trying to prove corruption and fraud in the transaction.
Malami wrote: “Your Excellency, recent
developments, particularly the series of losses recorded in cases that arose
from the facts of OPL 245 2011 Resolution Agreements in different
jurisdictions, should be concerning. These losses include:
“I. Judgment of the UK Courts delivered on 22
May 2020 declining jurisdiction in a case filed by FGN against Shell/SNUD and
ENI asking for compensation in the sum of $1.1 billion in relation to their
conduct in the OPL 245 2011 Resolution Agreements;
“II. Judgment of the Italian Constitutional
Court dated 17th March 2021, in the Prosecution of NAE in Milan, Italy for
international corruption allegedly connected with OPL 245 2011 Resolution
Agreements which was concluded in favour of ENI;
“III. Judgment delivered by the UK Court in
June 2022, the FGN lost its $1.7 billion claim against JP Morgan Bank over
transfers of proceeds from the sale of OPL 245 pursuant to the OPL 245 2011
Resolution Agreements.
“IV. The US Department of Justice previously
investigated the OPL 245 2011 transaction and announced in October 2019 that it
was closing the case.
“V. In April 2020, the US Securities and
Exchange Commission also closed investigation into the controversial OPL 245
deal after it could not prove fraud or corruption.”
Malami noted that upon the conclusion of the
case in Milan in March 2021, Buhari — with advice from the Nigerian Upstream
Petroleum Resources Commission (NUPRC) and the office of the AGF — granted
consent to convert the oil prospecting licence (OPL) to an oil mining lease
(OML) for NAE to commence production.
He recalled that Timi Sylva, then-minister of
state for petroleum resources, wrote to ENI in May 2022 to convey Nigeria’s
readiness to resolve all the issues but the assurance “remains ineffectual as
long as Charge CR: 151/2020 against ENI in Nigeria being prosecuted by EFCC
remains in Court”.
‘UNFRIENDLY
INVESTMENT DESTINATION’
In his assessment of the current situation,
Malami wrote: “In sum, Mr. President is invited to note that:
“(a) OPL 245 is the most priced Oil block in
the country.
“(b) FGN has gained certain benefits from
SNUD/NAE/ENI in respect of OPL 245. In particular, SNUD/NAE/ENI have made
payments to FGN and also expended resources thereon including:
“I. Cumulative total of $210 million
Signature Bonus.
“II. Approximately $500 million committed by
SNUD into the development and de-risking of OPL 245.
“III. Payment of $1,092,040,000.00 to Malabu
as consideration for the OPL 245 2011 Resolution Agreements.
“IV. Litigation cost of prosecuting the
several Suits connected with the subject matter in various jurisdictions.
“(c) By allowing SNUD alter its position in
the sums stated in (b) (I) to (IV) above, and without getting a corresponding
value for same over time through FGN’s Policy summersault, litigation and
disputes, Nigeria could reasonably be portrayed as an unfriendly investment
destination whose credibility is suspect.
“(d) FGN’s actions which denied SNUD/ENI/NAE
the opportunity to exploit OPL 245 led to ENI’s International Arbitral
Proceedings against FGN claiming $1.3 billion plus interest and arbitration
costs. (No: Case No. ARB/20/41/).
“(e) The controversies and litigations,
particularly the pending charge No CR/ 151/2020 filed by the EFCC against
NAE/ENI and others has placed encumbrance on the ability of FGN to enjoy the
financial benefits associated with the exploration OPL 245 with attendant
economic losses to the Nation.
“(f) Judicial determinations in Milan &
UK, and administrative decisions in the USA, all favourable to ENI/NAE,
together with the Consent Judgment earlier entered to which FGN was a Party
makes it a more beneficial approach for FGN to consider settlement of charge
No: CR/151/2020 as the best option in the circumstances.
“(g) Whilst the dispute and associated
litigation cum Arbitration lasted, neither SNUD/NAE nor even FGN would exploit
OPL 245 with negative economic consequences for FGN and the people of Nigeria
particularly in terms of foreign exchange earnings, loss of Tax income and
Royalty payments.
“(h) A careful review and evaluation of the
Charge No CR: 151/2020 pending at the FCT High Court, particularly the three
counts against ENI/NAE, SNUD & SNEPCO leads to an almost inevitable
conclusion that the Charge does not disclose sufficient evidence to excite any
prospect of success in the case.
“(i) It is in the best interest of the
Federal Government and Peoples of Nigeria, to resolve all issues connected with
OPL 245, especially the commercial issues, by discontinuing the pending charge
No CR/151/020, and to expedite the process of converting the OPL to an OML for
ENI/SNEPCO thereby taking advantage of the fast-disappearing opportunities in
the oil exploration industry, and attracting other high-net worth investors
that will provide the resources much needed in the Oil industry and by extension
our economy at this time.
“(j) The above conclusion is consistent with
my earlier letter dated 27th September 2017 ref: DPPA/FMPR/198/ 17, which
position was supported and re-established by Dr. Emmanuel Ibe Kachikwu and
Chief Timipre Sylva in their letters dated 13th December 2017 ref:
MPR/STAHMS/S.26/18, and 27th May 2022 respectively.”
PRAYERS TO
BUHARI
The AGF asked the president to allow the
cases to be terminated for progress to be made.
He wrote: “In view of the foregoing, and if
deemed appropriate, Mr. President may wish to:
“a) Direct the discontinuation of counts 2,
3, & 13 in Charge No CR: 151/2020 pending at the FCT High Court
particularly the counts against ENI/NAE, SNUD & SNEPCO.
“b) Direct the total discontinuation of all
investigations by all Law Enforcement Agencies, particularly, EFCC, involving
ENI/NAE, SNUD & SNEPCO in relation to OPL 245.
“c) Direct the NUPRC and any other relevant
Agencies to expedite the conversion of OPL 245 to an OML in furtherance of the
Ministerial Consent granted via the letter dated 16th May 2022 ref
PRES/88/MPR/90.
“d) Approve the settlement of all Civil cases
between FGN and ENI/NAE, SNUD & SNEPCO in relation to OPL 245.
“e) Approve that the Attorney-General of the
Federation and Minister of Justice exercise his powers under Section 174(1)(c)
of the 1999 Constitution of the Federal Republic of Nigeria (as amended) to
discontinue the case against NAE/ENI, SNUD & SNEPCO PROVIDED NAE/ENI, SNUD
& SNEPCO equally agree to discontinue the Arbitration Proceedings against
FGN on the grounds that FGN’s delay in converting the OPL 245 to an OML is a
breach of Nigeria’s obligations under the relevant Treaties, and to hold FGN
harmless in respect of all claims concerning OPL 245.”
THE MOHAMMED
ABACHA CASE
While Buhari may be disposed to resolving the
issues before leaving office, the fate of Mohammed Abacha remains an issue.
As previously reported by TheCable, the final
resolution depends on a proposal by the EFCC for a compensation to Abacha by
ENI.
Abacha is laying claim to the ownership of
Malabu Oil & Gas Ltd, the company awarded OPL 245 in 1998 by Sani Abacha,
his father and then-military head of state.
He alleged that the ownership documents of
the company were illegally altered, thereby denying him benefits from the $1.1
billion paid by Shell and ENI to acquire Malabu’s interest in the oil block.
The EFCC objected to the proposal to convert
the OPL to OML and for the court case to be discontinued, saying it “did not
consider the interest of the actual shareholders of the Malabu Oil and Gas
Limited (Mohammed Sani Abacha and Pecos Energy Limited) culminating in the
various litigations regarding OPL 245. This action has globally undermined the
image of the Federal Republic of Nigeria”.
It was gathered that EFCC is proposing that
ENI should set aside $500 million from the proceeds of production to compensate
Abacha.
In a case filed in court by the EFCC against
Malabu, Shell, Eni, Adoke, Aliyu Abubakar, Etete, and Rasky Gbinigie (Malabu’s
company secretary), the anti-graft is alleging that they colluded to remove
Abacha’s name as a director of Malabu.
According to reports, a man named “Mohammed
Sani” originally had 50 percent in the company, with “Kweku Amafegha”, believed
to be a pseudonym for Etete, owning 30 percent; and Wabi Hassan, the wife of
Hassan Adamu, Nigeria’s then-ambassador to the US, was credited with owning 20
percent.
Mohammed Abacha, who is EFCC’s key witness,
told the court that he was the “Mohammed Sani” but admitted that he did not pay
for the shares either in cash or by any other means.
The case is ongoing.
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