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Former attorney General of the Federation and Minister of Justice, Mohammed Adoke

$2bn Malabu oil deal probe: Adoke writes Osinbajo, defends transfer of cash to Malabu

As the controversy over the $2 billion Malabu oil deal resurfaces, the immediate past Attorney General of the Federation, Mr. Mohammed Adoke, has said his office facilitated the settlement agreement between feuding parties and the Federal Government in the interest of Nigeria. Former attorney General of the Federation and Minister of Justice, Mohammed AdokeFormer attorney General of the Federation and Minister of Justice, Mohammed Adoke Adoke, yesterday, dispatched a detailed explanation to the Vice President, Mr Yemi Osinbajo, on how the decision to settle out of court between the parties involved in the multi-billion deal was reached and why the Federal Government of Nigeria was paid a pittance of $210 million out of the $2 billion. Adoke’s explanation comes on the heels of his invitation by the Economic and Financial Crimes Commission, EFCC, to explain how the decision to pay a whopping sum of money to certain individuals and entities named in the Malabu oil deal was reached, who determined the ratio of sharing and why the government got a negligible fraction of the huge payout. Vanguard learned, last night, that Adoke and many other top Nigerians, including a former National Security Adviser and Finance Minister, might be summoned to speak on their roles in the sharing of the cash, which many believed went into the hands of vested interest and largely short-changed the Federal Government of Nigeria. But Adoke insisted in a six-page document obtained by Vanguard that he acted in the overall best interest of Nigeria to prevent a protracted litigation that would have left Nigeria in a bad shape and lowered its image, given the international dimension the matter had assumed before his appointment. The former Justice minister insisted that any responsible Attorney General of the Federation would have done what he did to safeguard the interest of the country and avoid a liability that potentially stood against it. Adoke stated that given the threat from Shell to sue the government over loss of over $2 billion and the loss of investments, he had to encourage a definitive resolution between the parties, who had expressed an intention to settle out of court but were untrusting of each other, given their antecedents. He said as at the date of the settlement in 2006 and the resolution agreement in 2011, OPL 245 had been exclusively vested in Malabu and subjected to the conditions spelled out in the allocation of the oil bloc. According to him, the interest of the Federal Government at the time of the resolution in 2011 was to ensure the payment of the signature bonus on the bloc and that the bloc was developed to enable the country earn revenue through royalty and taxes. FG only entitled to $210m signature bonus Part of the letter read: “That consistent with Nigerian law governing oil and gas and the allocation of oil blocks, the signature bonus due and payable to the FGN amounting to $210 million was duly paid and acknowledged. “The taxes and royalties associated with oil produced from the block are also now being paid. This is contrary to the lies and misinformation being peddled that Nigeria was short changed in the transaction. “That at all times material to the resolution of the disputes between Malabu/Shell/FGN and one Mohammed Sani, who now claims to be Mohammed Abacha, was not a party to the transaction and did not disclose any personal or family interest in OPL 245 to the administration of Gen Abdulsalami Abubakar or to the administration of President Olusegun Obasanjo. Mohammed Abacha not party to deal “That Mohammed Abacha did not participate in the negotiations leading to the resolution or settlement agreements; that Mr. Abacha surfaced only after the tripartite resolution of the matter between Shell/Malabo and the FGN to request that the Office of the Attorney General of the Federation should prevail on the main shareholder of Malabu to respect their interests in Malabu by paying them part of the proceeds.” Adoke said it was wrong to assume that the money accruable for Malabu belonged to the Federal Government and asked those who thought so to perish their thoughts. He said: “It is, therefore, incorrect and contrary to as widely claimed in some quarters, that the money paid to Malabu, which was only warehoused in an escrow account, was meant for the Nigerian Government and that the country was, thereby, short-changed. “Malabu, as title-holder of the oil bloc, merely dispensed of her interest in it as allowed by law. This, indeed, is the case with similar oil blocs allocated to several notable Nigerians who also disposed of their interests to oil multinationals and are enjoying the proceeds without any eyebrow or allegations of corruption.” Appeal to vice president While absolving himself of any wrongdoing in the matter, Adoke asked the Vice President to use his office to protect the office of the AGF from mischief makers and politicians. He also drew the attention of the Vice President to the fact that Shell and other firms involved in the deal had breached the laws of their home countries, either by non-disclosures and or tax evasion, Nigeria should assist such countries to ascertain the truth and not to criminalise public office holders to satisfy what he called “narrow interests” of shareholders fighting over the assets of their company. History of Malabu Oil Prospecting License (OPL) 245 which was granted to Malabu Oil and Gas Limited by the administration of General Sani Abacha, GCFR in 1998, was subsequently revoked by the administration of President Olusegun Obasanjo in 2001 and re- allocated to Shell Nigeria Ultra Deep Limited (SNUD) in 2002 under a Production Sharing Contract (PSC) arrangement. But at the time of revocation and re-award, Malabu and SNUD had a binding Joint Operating Agreement to exploit the block with SNUD as technical partner to the Venture. Deeply aggrieved over the revocation, Malabu petitioned the House of Representatives Committee on Petroleum, which after a public hearing, condemned the revocation and re- allocation to SNUD and recommended that the block be restored to Malabu. Strengthened by the House position, Malabu also sued the Federal Government of Nigeria and SNUD at the FHC in Suit No FHC/ABJ/CS/420/2003 claiming several declaratory reliefs including an order setting aside the re-allocation to SNUD and a restoration of the block to Malabu. The suit was struck out but on appeal, the parties entered into a settlement dated 30th November 2006 which were executed by Chief Bayo Ojo, SAN, the then AGF. The terms of Settlement were filed in court as consent judgment and a key term in the settlement was the restoration of the Oil block 245 to Malabu by the federal government.


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