Premium Times: Nigeria: Malabu $1.1 Billion Fraud – Shell, Eni Want Nigeria’s Richest Oil Block Back
Although Shell and ENI have repeatedly claimed they did not know the money was going to end up with Malabu, investigations in Nigeria and Italy as well as leaked documents revealed that claim to be false.
14 February 2017
By Evelyn Okakwu
Two multinational oil firms have challenged the propriety of the Nigerian government withdrawing a major oil block from them.
Shell and Eni, through their Nigerian subsidiaries, asked a Federal High Court to reverse an order that revoked the award of OPL 245 to them.
Justice John Tsoho of the Federal High Court had on January 26 granted an interim order directing the return of the block – Nigeria’s richest, estimated to contain over 9 billion barrels of crude – to the Nigerian government,
The order was sought by the Economic and Financial Crimes Commission, EFCC, which said it was investigating the corruption surrounding the block.
The EFCC has in a separate case charged two former Nigerian ministers, Mohammed Adoke and Dan Etete, as well as businessman Abubakar Aliyu to court for their roles in the $1.1 billion scandal, money paid by Shell and Eni to control the block. The commission is also expected to file charges against the oil majors soon; although they are already facing similar indictments in Italy, and investigations in the U.S., Netherlands, and UK.
The hearing on the application by the oil majors was stalled on Tuesday on the request of the EFCC who sought time to respond to the applications.
At the opening of session on the matter, the counsel representing the EFCC, J. A. Ojogbame prayed the court for an adjournment to allow him file his reply to the applications.
He explained that he has had some predicaments which prevented him from being able to respond to the application.
The counsel representing Shell, O. Ajayi, objected to the application for adjournment, saying that the EFCC had obtained an order ex-parte, which allowed the commission to have control over the OPL 245.
Mr. Ajayi, a Senior Advocate of Nigeria, said the EFCC had in its motion ex-parte, regarded the Malabu oil scam as an urgent matter requiring prompt attention. He, therefore, questioned the failure of the commission to respond to the applications almost two weeks after receiving the motion from the applicants.
After hearing the arguments, Justice Tsoho adjourned the hearing till February 27.
The EFCC had in December filled a nine-count charge of fraud against former petroleum minister Dan Etete, former Attorney General Bello Adoke, controversial businessman Aliyu Abubakar and some local firms.
The charge against Mr Etete is that he fraudulently received a total of $801 million from the Nigerian government, part of the money paid by the oil giants.
The two charges filed against Mr. Adoke were that he aided the transfer of the money to Mr. Etete and conspired with him to “commit money laundering offences”.
Mr. Aliyu was accused of receiving a total of $478.6 million fraudulently from the transaction.
The $1.1 billion 2011 deal
After several political and judicial intrigues that ensured OPL 245 changed hands several times between Malabu, Shell, and the Nigerian government, Goodluck Jonathan emerged Nigeria’s president in 2010. On the prompting of his attorney general, Mohammed Adoke, one of Mr. Jonathan’s first directive upon assuming office was that the oil block be given to Malabu.
Persons close to Mr. Jonathan told PREMIUM TIMES the former president took the decision because of his closeness to Mr. Etete who had helped him during his tenure as petroleum minister and because of the perception among persons from the oil producing Niger Delta that OPL 245 was one of the few oil blocks awarded to someone from the region.
By 2010, Mr. Etete had schemed out other owners of Malabu including by fraudulently altering Corporate Affairs Corporation, CAC, documents, investigations revealed.
The CAC recently said its official in charge of the Malabu documents was “brutally murdered”.
Despite Mr. Jonathan’s directive that Malabu be given OPL 245, the company really did not exist and had no staff or technical competence to manage the block. Based on advice from desperate businessmen including an Israeli, Ednan Agaev, Mr. Etete decided to cash in on the block. Through various middlemen, the former minister approached oil giants, Shell and ENI, to buy the block. Knowing Mr. Etete’s history including the fact that he had been convicted in France for money laundering, the oil firms would not do a direct deal.
For the transaction to continue, a legally recognised mediator would have to be found.
That mediator turned out to be the Nigerian government, represented by Mr. Adoke.
The agreements that were sealed led to Shell and ENI paying the $1.1 billion into a Nigerian government account in JP Morgan Chase in London. The money was to then be transferred to Malabu accounts controlled by Mr. Etete.
Although Shell and ENI have repeatedly claimed they did not know the money was going to end up with Malabu, investigations in Nigeria and Italy as well as leaked documents revealed that claim to be false. Mr. Adoke himself would later admit that he, on behalf of the federal government, only acted as a mediator for two willing parties – Malabu and the oil majors. Mr. Adoke was, however, aware of the various fraudulent manipulations of Malabu by Mr. Etete when he authorised the transaction, multiple sources have told PREMIUM TIMES.
THE TRANSFERS TO FRAUDULENT FIRMS
To ensure no one stopped the shady transfer of the $1.1 billion to Mr. Etete, the money had to be quickly transferred. More so, Ngozi Okonjo-Iweala was set to assume office as Nigeria’s Finance Minister and the officials involved were not sure she would play ball.
On August 16, 2011, a day before Mrs. Okonjo-Iweala was to assume office, Mr. Adoke and the then Minister of State for Finance, Yerima Ngama, authorised the transfer of the money to Malabu accounts in Nigeria controlled by Mr. Adoke. However, all the $1.1 billion could not be transferred. Emeka Obi, a man who claimed he helped broker the deal between Malabu and the oil majors filed a suit in the UK, that ensured $215 million was frozen of the money. The remaining $801 million was subsequently transferred to Mr. Etete: $400 million was transferred to a Bank PHB account while $401 million was transferred to a First Bank account.
Immediately Mr. Etete received the money, curious transfers began. PREMIUM TIMES investigations, now confirmed by the EFCC, reveal that shady companies linked to Abubakar Aliyu received about $479 million dollars from Mr. Etete. Our investigations later showed that most of the companies were non-existent and used fake addresses in their registration documents.
The companies – Rocky Top Resource Ltd, Imperial Union Ltd, Novel Properties & Dev. Co. Ltd, A-Group Construction Ltd, and Megatech Engineering Ltd – were all charged in the suit filed by the EFCC.
While Mr. Etete later admitted that only $250 million of the money paid into his account was his, Mr. Aliyu is believed to have acted as a front for officials of the Goodluck Jonathan administration including Mr. Adoke.