A Nigerian court has ordered petroleum giants Shell and Eni, among others, to temporarily forfeit assets and transfer operations of a massive, long-disputed oilfield to the federal government, Reuters reported.
The court order is in effect until Nigeria’s anti-corruption agency completes an investigation into how the current owners acquired oil prospecting licence (OPL) 245, according to papers released Thursday.
The $1.2 billion corruption scandal has also been investigated by the U.S., Italy, France, Switzerland and Holland, according to a Nigerian Federal High Court document, the Associated Press reported in US News.
The court on Thursday ceded control of Oil Prospecting License 245 to the government while the West African country’s Economic and Financial Crimes Commission investigates and prosecutes suspects in the “Malabu Oil scam,” according to a statement from the commission.
The OPL 245 bloc is considered the richest in Africa, Premium Times reported. It is estimated to hold more than 9 billion barrels of crude and even larger gas reserves.
For perspective, at Nigeria’s current OPEC oil output quota of 2.2 million barrels per day, OPL 245 alone can provide all Nigeria’s oil production needs for over 11 years.
The lawsuit says Dutch-British corporation Shell and Italian Eni — formerly Agip — bought the bloc in 2011 knowing it was a fraudulent transaction. It says they knew that the $1.2 billion payment was a bribe to former Nigerian Petroleum Minister Dan Etete and his allies. The state oil company got $210 million from the deal.
The government is investigating whether the purchase of OPL 245 involved “acts of conspiracy, bribery, official corruption and money laundering,” according to court papers, Reuters reported.
Criminal charges have been filed against both companies and executives in an Italian court. Eni denies wrongdoing and Shell Nigeria had no comment.
“This is historic. Generations of Nigerians have been robbed of life-saving services while oil men have grown rich at their expense,” said Simon Taylor of the London- and Washington, D.C.-based anti-corruption NGO Global Witness. “Companies and their investors must understand they can no longer do backdoor deals with corrupt officials without paying a hefty price.”
The oil companies paid the $1.2 billion into a Nigerian government escrow account at the London branch of JPMorgan Chase, AP reported. Former Justice Minister Mohammed Bello Adoke authorized its distribution.
The commission filed charges in December of fraud and money laundering against Adoke, former Petroleum Minister Etete, and businessman Aliyu Abubakar.
The petition says Etete and Nigeria’s former military dictator Gen. Sani Abacha used front men to form Malabu Oil and Gas Ltd. and illegally awarded themselves OPL 245. After Abacha’s mysterious death in 1998, the company directors and shareholding was fraudulently altered to divest Abacha’s son, Mohammed, it says.
This is the latest of many inquiries, including by Dutch and Italian authorities, into the 2011 purchase of the OPL 245 block, Reuters reported.
Nigeria’s anti-corruption agency, the Economic and Financial Crimes Commission (EFCC), filed the papers to the court in the capital Abuja on Jan. 11. The other parties can challenge the decision.
The watchdog group cannot say when the investigations will be concluded, spokesman Wilson Uwujaren told Reuters.
The oil field’s licence was initially awarded in 1998 by former Nigerian Oil Minister Dan Etete to Malabu Oil and Gas, a company he owned shares in.
For the next 12 years the oil block would change hands between Malabu, Shell and the Nigerian government as all parties schemed for control, according to Premium Times. Disagreement started in 2001 when the Nigeria government first cancelled the award of the block to Malabu and gave it to Shell, investigations showed. The government would later revoke the allocation from Shell.
In 2010, President Goodluck Jonathan appeared to resolve the controversy when he directed that the block be given to Malabu.
Having done several technical works on the block and realizing how rich it was, Shell would not let go and was willing to play ball. Along with Italian oil giant Eni, the Anglo-Dutch firm paid $1.097 billion into a Nigerian government account in 2011 for the block.
Over 70 percent of the payment ($801 million) was controversially transferred to Etete, the man who as petroleum minister in 1998 first awarded the block to Malabu. Etete would later transfer more than half of this sum into accounts of phony companies controlled by Aliyu Abubakar, a man believed to have acted as a front for politically exposed persons including Jonathan and his attorney general, Mohammed Adoke, as well as Shell and Eni staff.The way the money paid by the oil giants was laundered would later lead to investigations in at least five countries culminating in various corruption charges.
