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Monday 8 February 2016

Acting President Osinbajo in turf war over $1.3 billion Malabu scam

For Malabu scam “Cold War” between the Attorney General Abubakar Malami, and Vice President Yemi Osinbajo...

On Thursday, January 28, Ibrahim Magu, the acting chairman of Nigeria’s anti-corruption agency, the Economic and Financial Crimes Commission (EFCC), received a letter.


The two-paragraph letter from the office of the Attorney General of the Federation and Minister of Justice, made only one request from the anti-graft chief. Signed by Muhammad Diri, the Director of Public Prosecutions of the Federation, the letter asked Mr. Magu to forward “the case diary in respect of investigation into” the OPL 245 Malabu scandal.

The letter, which should normally be a routine one, caused a dilemma to the EFCC chief. It put him directly in the middle of a conflict, a senior government official called “cold war” between the Attorney General Abubakar Malami, and Vice President Yemi Osinbajo.

The crux of the disagreement between the vice president and the attorney general concerns what decision the administration should take as it tries to resolve the fraud and controversy surrounding the allocation of immensely rich OPL 245 to Malabu and its subsequent assignment to oil majors, Shell and Eni.

PREMIUM TIMES had exclusively reported the recommendations made by the justice ministry to the presidency regarding the resolution of a long-drawn scandal which has given Nigeria a bad name, and is being investigated by authorities in Italy, UK, Nigeria, and the U.S.

The recommendations

One of the recommendations which has since been accepted by the Attorney General was for the nullification of the tripartite agreements that ceded the oil bloc to Shell and Eni. The committee described the agreements as “null and void”, saying it “should not be given any legal effect by the FGN (Federal Government of Nigeria) as doing so would amount to the FGN condoning and perpetuating illegality.”

The two oil firms had in 2011 agreed to pay to Malabu, through the Nigerian government, the sum of $1.3 billion dollars for the bloc. While the oil firms claimed at different times that they paid the money into the Nigerian government account not knowing who the final recipient would be, the former attorney general, Mohammed Adoke, who co-signed the agreements on behalf of the federal government, said the government only served as a mediator between two willing parties.

Over $800 million of the money has since been paid into accounts controlled by ex- petroleum minister, Dan Etete, with most of it believed to have been distributed through phoney companies to top Nigerian government officials, including Mr. Adoke.

Apart from calling for the cancellation of the agreements and the retrieval of the bloc, estimated to contain about nine billion barrels of crude, the justice ministry also called for the prosecution of both Nigerian and foreign officials involved in the scam.

It also recommended that Shell and Eni be fined at least $6.5 billion (five times the $1.3 billion Shell and Eni originally paid in 2011 the block) for their roles. This, it stated, should be done “in accordance with the relevant provisions of our laws in conformity with international best practices via the appropriate courts (at) home or abroad as the case may be.”

Although Mr. Malami is yet to formally advice the presidency on these recommendations, multiple sources close to the Vice President said he was already aware of them and agrees with all but one.

The disagreement

One of the major recommendations of the justice ministry was that the oil bloc return to Malabu.

“Properly speaking, in the eyes of the law, OPL 245 still belongs to Malabu and was never fully transferred to Shell/Agip/Eni,” the ministry’s committee that reviewed the case said in its report.

A lawyer who was involved in drafting the ministry’s recommendations told PREMIUM TIMES that that conclusion was based on some considerations: Malabu was the only one legally allocated the oil bloc by Nigerian government; Mr. Etete who represented Malabu during the 2011 agreement was not a shareholder of the company and had no legal right to do so, an information to which all the other parties including Shell, Eni, and the Nigerian government were privy of; and past presidents, including Olusegun Obasanjo and Goodluck Jonathan, had all agreed Malabu was the owner of the bloc.
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