Monday, 24 April 2017

I did not lead team that brokered Malabu Oil block ideal, says Adoke

Former Minister of Justice and Attorney General of Federation, Mr. Mohammed Bello Adoke has refuted reports that he led the team that brokered the Malabu oil deal. 

Reacting to a recent publication in a National Daily Newspaper, Adoke, in a statement by his Media Officer, Victor Akhidenor said “While we share the view that government should ensure an end to the Malabu Saga, we wish to correct the erroneous view that Mr. Mohammed Bello Adoke, SAN, led the government team that brokered the deal, which resulted in the sale of the controversial oil well in 2011”.
It will be recalled that Mr. Adoke had on several occasions reiterated that the Malabu transaction preceded him in Office. The former Minister claimed that the initial allocation of the Block 245 took place in 1998 when the administration of Gen Sani Abacha in pursuance of its policy of promoting indigenous participation in the upstream sector of the oil industry allocated it to Malabu Oil and Gas Limited (Malabu). He stated that in 2001, “the administration of former President Olusegun Obasanjo revoked OPL 245 and re-allocated it to Shell Ultra Deep Limited (Shell), Malabu’s technical partners when they were initially allocated the block in 1998. It was Malabu’s dissatisfaction with the revocation that led to series of litigation between it and the Federal Government of Nigeria (FGN). Shell, aware of the pending litigation paid only $ 1 Million out of the $210 signature bonus that was fixed by the administration of President Obasanjo to the government and warehoused the balance of $209 into an escrow account jointly managed by Shell and the FGN”.
In 2006, Malabu and the Federal government allegedly reached a settlement, which was reduced to a Consent Judgment of the Federal High Court, Abuja. Under the terms of Settlement Agreement dated 30th November 2006, the Nigerian government allegedly agreed to restore OPL 245 to Malabu and Malabu agreed to withdraw its pending litigation against the government. But Shell was dissatisfied with this arrangement and commenced Investor/State arbitration before ICSID claiming over $2 Billion as damages from the Federal government.

Adoke maintained that at the time of his involvement in 201, the following issues were already settled:
(a) the title to OPL 245 was already vested in Malabu Oil and Gas Limited;
(b) the signature bonus of $210million was already fixed by the administration of President Olusegun Obasanjo, and Shell had already paid $1 Million and kept the balance of $ 209 in an escrow account jointly managed by Shell and FGN with JP Morgan;
(c) the FGN was exposed to a potential liability of over $2 Billion arising from the Investor/state arbitration instituted by Shell before ICSID;
(d) OPL 245 could not be operated because Malabu was unable to get a technical partner as a result of the caveat that Shell had put on the Block.

The former Minister whose role has become controversial said his involvement in the transaction as a facilitator was to ensure that the Federal government was released from the contingent liability arising from the arbitration instituted by Shell, which claimed to have de-risked the block at substantial cost with the knowledge and approval of the government. Adoke maintains that if government had not allowed Shell to de-risk the Block while litigation was pending, Shell would have had no basis to claim such huge sums in damages from the goverment.

To resolve the contending issues, he said government agreed to act as facilitator to ensure that Malabu relinquished its title to OPL 245 and the re-allocation of same to Shell/ENI. By this arrangement, the Nigerian government was thus entitled to its signature bonus of $210 million as fixed by the administration of President Obasanjo; Malabu as owner of OPL 245 got the proceeds of its sale of the Block and Shell/ENI paid Malabu the agreed sum they had negotiated amongst themselves. Adoke reiterated that these were the issues that were facilitated by the Federal government and duly reflected in the OPL 245 Resolution Agreement and Re-Allocation Agreement of 2011.
He denied ever receiving any bribe from anyone in respect of the transaction or any other transaction that he was involved on behalf of the Federal government in his capacity as Attorney General of the Federation and Minister of Justice and maintains that he did not initiate or broker the Malabu transaction as widely believed by some people.

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