Ibe Kachikwu, minister of state
for petroleum resources, has advised the federal government to “take advantage”
of the controversial but profilic OPL 245.
Kachikwu’s advice was contained
in a letter to Abba Kyari, chief of staff to President Muhammadu Buhari, in
response to an initial letter titled “Forwarding of case file in respect of
charge no FHC/ABJ/CR/268/17 and FCT/HC/CR/124/2017 – Malabu Oil and Gas
Limited”.
The letter was one of the
documents tendered at the federal high court in the cited case between the
attorney general of the federation (AGF) and Mohammed Bello Adoke, former AGF,
which ruling has been fixed for February 23.
In 2011, Shell and Eni paid about
$1.3 billion to the federal government to acquire 50% stake each in the OPL 245
– said to be Nigeria’s biggest oil deal.
While $210 million was paid to
the federal government as signature bonus, Malabu Oil and Gas Ltd, the original
owner of the block, got $1.1 billion for its entire rights in the block.
But the transaction has since
been subject of litigation and investigation by security agencies in the UK,
Italy and Nigeria, on the grounds that the oil block was fraught with
irregularities.
According to TheCable, it had
reported that the two principal stakeholders in the acreage, Anglo/Dutch firm
Shell and Italian oil giant Eni, are proceeding with its development of the
main oil field already discovered.
The two oil giants took the final
investment decision (FID) to develop the field known as Zabazaba field, which
holds an estimated oil reserves of up to a billion barrels and whose
development project is estimated at $13.5 billion.
In the letter dated December
13th, 2017, Kachikwu advised that the federal government should proceed with
the oil deal and ensure its conversion to a product sharing contract.
He said proceeding with the deal
will is not only a “strategic” approach to the OPL 245 controversy that has
lingered for years but will also ensure the country bears no financial cost in
its development.
He warned of the negative
implications that may follow should international arbitration stem from the
matter.
“My experience is that the
potency of bilateral investment treaties upon which a claim could be made on
Nigeria is such that any attempt to abrogate the settlement agreement or take
any steps to undermine its integrity could prove costly to the country,” he
said.
“In the circumstances following
the advice, I respectfully recommend that the federal government should take
advantage of the settlement agreement to acquire an interest in OPL 245 and
ensure its conversion to a production sharing contract between the federal government
and relevant parties as per paragraph 7 of the attorney general’s letter.
“This will not only ensure that
Nigeria will bear no funding obligations for the development of the block, but
will be a strategic, yet commercial approach and solution to the OPL 245 issue
which will ensure that Nigeria is focused on obtaining an immediate benefit
from OPL 245.”
In December 2017, an Italian
court ordered the executives of Shell and Oni to undergo trial over allegations
of bribery in securing the oil block from Malabu.
Adoke and Etete are among those
accused by the Economic and Financial Crimes Commission (EFCC) of committing a
$1.1 billion fraud in the deal.
Both have strongly denied any
wrongdoing.
Meanwhile, in a letter dated
September 20, 2017, Abubakar Malami, the AGF told Ibrahim Magu, acting chairman
of EFCC, that nothing in the court charges links the duo to the alleged
offence.
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