From Business News
Nigeria should revoke oil rights for which Royal Dutch Shell Plc and Eni SpA paid $1.1 billion, a parliamentary committee said, alleging that the acquisition process was “highly flawed.”
Shell and Eni jointly bought Oil Prospecting License 245 from Malabu Oil & Gas Ltd., controlled by Dan Etete, a former oil minister, in 2011.
Located in the deep offshore waters of the Gulf of Guinea, it is estimated to hold at least 9 billion barrels of crude reserves worth $1 trillion, according to a probe report by a House of Representatives committee filed as a public record and provided to Bloomberg Friday.
“Unfortunately our national interest, knowingly or unknowingly, was ceded away to the two oil majors,” the committee said.
The sale violates a law to promote increased Nigerian ownership of oil assets by giving foreign companies 100 percent ownership as well as the country’s tax regulations, the report said, alleging a “lack of transparency and full disclosure” by Shell in acquiring the license.
Nigeria is Africa’s largest oil producer, with Shell, Exxon Mobil Corp., Chevron Corp. , Total SA and Eni running joint ventures with state-owned Nigerian National Petroleum Corp that pump more than 90 percent of the country’s oil.
The West African nation produced 1.83 million barrels a day of oil in June, according to data compiled by Bloomberg.
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