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FG denies allegation of round-tripping $1.1billion in the Malabu / Shell oil saga

The federal government has denied allegations that the $1.1billion proceeds paid to Malabu Oil and Gas Limited in settlement of the dispute between the company … Continue reading FG denies allegation of round-tripping $1.1billion in the Malabu / Shell oil saga


The federal government has denied allegations that the $1.1billion proceeds paid to Malabu Oil and Gas Limited in settlement of the dispute between the company and Shell Nigeria Ultra Deep Limited (SNUD), over oil block 245, was shared by some private firms owned by people very close to the presidency.

A statement, signed by the Attorney General of the Federation (AGF) and Minister of Justice, Mr Mohammed Bello Adoke, explained that the federal government’s role in the saga was limited to helping to facilitate a peaceful settlement of the dispute.

Acknowledging that Malabu and SNUD had a protracted dispute over the ownership and right to operate oil block 245, the AGF noted that the allegations against the federal government cannot be substantiated due to its role as a facilitator to resolve the saga, out of court and serve as an obligor to an agreements reached, by the two parties.

Malabu had filed several suits against the federal government and the oil companies, over the withdrawal of its Operating Licence (OPL) for oil Block 245 in July 2001, which was later awarded to Shell in April 2002 after a round of bidding. Malabu was said to be dissatisfied with the revocation and contended that the circumstances leading to the revocation of its licence on Block 245 was less than transparent and smacked of inducement and connivance from SNUD, which was its technical partner for the initial OPL.

According to Mr Adoke, after series of litigation in Nigeria’s High and Appeal Courts and also in the United States, “SNUD and ENI agreed to pay Malabu through the Federal Government acting as an obligor, the sum of $ 1,092,040,000 billion in full and final settlement of any and all claims, interests or rights relating to or in connection with Block 245 and Malabu agreed to settle and waive any and all claims, interests or rights relating  to or in connection with Block 245 and also consented to the re-allocation of Block 245 to Nigerian Agip Exploration Limited (NAE) and Shell Nigeria Exploration and Production Company Limited (SNEPCO).”

“It is also clear that the allegation of round-tripping levelled against the federal government of Nigeria is without basis and cannot be substantiated having regard to the role it played as mere facilitator of an amicable settlement between two disputing parties over a long standing dispute with obvious economic implications for the country” the statement added.

The AGF further noted that “government has overtime demonstrated its commitment to attract investment in the oil and gas sector of the economy and encourage genuine investors (local and foreign) by creating the enabling environment for their business to thrive.”

“The resolution of the lingering dispute over Block 245 was in furtherance of that objective. Accordingly, the federal government of Nigeria, its agencies and officials should not be dragged into a purely commercial dispute between Malabu and its purported partners” the statement read.

An online news platform, PREMIUM TIMES had last week reported on how the Federal Government, Nigeria Agip Exploration Limited (Agip) and Shell Nigeria Exploration and Production Company Limited, allegedly, entered into a secret deal in which the oil companies paid $1.1 billion to the Federal Government which was then transferred to Malabu.

The report also alleged that the AGF and the Minister of State for Finance Yerima Ngama transferred the funds to accounts of various Nigerian companies who are believed to be fronts for senior government officials.

The statement by the AGF was concluded by denying any role of a third party to the transaction, stating that “at all times material to the resolution of the dispute, the Federal Government was not aware of any subsisting third party interest in Malabu’s claim to OPL 245 and neither did any person or company apply to be joined in the negotiations as an interested party.”