The Attorney General of the Federation (AGF) and Minister of Justice, Mohammed Bello Adoke has replied the House of Representatives on the Malabu deal, saying the federal government only played the role of a facilitator and not a core interested party.
The House had investigated the dispute between Shell/Agip and Malabu Oil and Gas Limited over the ownership and who has the right to operate Oil Block OPL 245, indicting the Attorney General of the Federation.
In a statement by his Chief Press Secretary, Ambrose Momoh on Wednesday, the AGF described the alleged report as mischief, insisting his office only facilitated the settlement of the dispute.
While wondering why the matter is generating vested interest among member of the committee that investigated it, Mr. Adoke threatened to expose the deal that went on underneath, even as he said he refused to compromise when he appeared before the committee.
The AGF’s reply reads in full, “The attention of the office of the Attorney General of the Federation and Minister of Justice has been drawn to the alleged Report of the House of Representatives Committee on the transaction involving the Federal Government and Shell/Agip Companies, and Malabu Oil and Gas Limited in respect of Oil Block OPL 245, part of which has been serialized in the print media.
“Furthermore, it is reported that the Attorney General of the Federation had stated that he was cleared by the alleged Report of the Committee for the role played by his Office in facilitating the settlement between Malabu Oil & Gas Limited (Malabu) and Shell Nigeria Ultra Deep Limited (SNUD) over their long standing dispute over the ownership and right to operate Block 245.
“In view of the misrepresentations and obvious mischief in reporting the role of the Federal Government, its agencies and officials in the settlement of the dispute, it has become necessary to issue this statement so as to set the records straight and properly explain the role played by the Federal Government, its agencies and officials in settlement of the dispute.
“It is apposite to state that although the dispute between Malabu and SNUD predates Mr. Mohammed Bello Adoke, SAN, CFR in office, available records reveal that the Federal Government in furtherance of its Indigenous Exploration Programme Policy introduced in the early 1990s to encourage effective development of indigenous capability in the upstream sector of the oil industry, allocated Oil Blocks to indiginous Oil and Gas Companies which they were expected to develop in partnership with international oil companies as Technical Partners.
“Malabu, an indiginous Oil and Gas company was allocated OPL 245 in April, 1998 and in accordance with the terms of the grant, it appointed SNUD as its Technical Partner. The two companies executed relevant Agreements including a Joint Operation Agreement in 2001. Records indicate that SNUD took 40% participating interests in the venture in a farm-in- agreement and also signed agreement with Malabu as its technical partner for the venture.
“Although, Malabu was issued a licence for Block 245 in April 2001, the same licence was subsequently revoked by the Federal Government on 2nd July, 2001. Exxon-Mobil and Shell were then invited in April 2002 to bid for OPL 245, despite the existence of subsisting contractual agreements between Malabu and SNUD with respect to OPL 245. Malabu was 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 at the material time was its technical partner.
“ Malabu also contended that the subsequent re-award of OPL 245 to SNUD by the Federal Government was done under questionable circumstances. It then petitioned the House of Representatives Committee on Petroleum to look into the matter. It is important to note that the House of Representatives Committee on Petroleum found no rational basis for the revocation and reprimanded Shell for its complicity. The Committee also directed the Federal Government to
withdraw the re-award, it made to Shell and return OPL 245 to Malabu, the original allotee of the Block.
“In addition to its recourse to the House of Representatives Committee on Petroleum, Malabu also instituted Suit No. FHC/ABJ/CS/420/2003, before the Federal High Court (FHC), Abuja to
enforce its claim to OPL 245. Although, the suit was struck out by the FHC, Malabu proceeded tp lodge Appeal No. CA/A/99M/2006 before the Court Appeal, Abuja, Division. During the pendency of the Appeal, an amicable settlement was entered into between Malabu and the Federal Government and in compliance with the Terms of Settlement executed by the Parties on the 30th of November 2006, OPL 245 was fully and completely restored to Malabu in consideration for its withdrawal of
“Apparently dissatisfied with the Terms of Settlement between the Federal Government and Malabu, SNUD commenced arbitral proceedings against the decision of the Federal Government to restore/re-allocate OPL 245 to Malabu at the International Centre for the Settlement of Investment Disputes (ICSID) in Washington DC, and made representations to government on the impending arbitration. It also commenced a suit against the Government before the Federal High Court, Abuja.
“Although, several meetings were held between the Presidency, Ministry of Petroleum Resources, SNUD and Malabu, to resolve the dispute, no satisfactory outcome was achieved. Attempts were also made in 2007 to resolve the dispute by a Committee comprising the Honourable Minister of State, Petroleum Resources, the Attorney General of the Federation and Minister of Justice, Minister of Energy, Group Managing Director, NNPC and DPR, the issues could not be amicably resolved before the administration of Late President Umaru Musa Yar’Adua GCFR came to power.
“ It is also important to note that SNUD had entered into a Production Sharing Contract with the NNPC in 2004 upon which their claim to OPL 245 was anchored and had paid $1Million US Dollars out of the $210 Million US Dollars signature bonus to the Federal Government, and kept the balance of $209 Million US dollars in an Escrow Account with J.P. Morgan pending the resolution of the dispute between Malabu and the Federal Government.
“In 2010, when this administration came to power, Malabu again, petitioned the Federal Government to implement the terms of the out-of-court settlement of 30th November 2006 on the basis of which they had discontinued their Appeal. Government also took cognisance of the pending cases instituted by SNUD against Federal Government of Nigeria (FGN) and/or Malabu, including Bilateral Investment Treaty (BIT) arbitration No. ARB/ 07/18 pending at the International Centre for the Settlement of Investment Disputes (ICSID Arbitration) to enforce SNUD’s rights to exclusively operate Block 245 as Contractor on the basis of the 2003 Production Sharaing Contract(PSC) between NNPCand SNUD, and the financial implications of defending these actions on the public purse and opted for amicable resolution of the dispute.
“To resolve all the contending claims in a satisfactory and holistic manner, due regard was given to the Terms of Settlement of 30th November 2006 which had been reduced to Orders of the Court, the underlying policy of encouraging the participation indigenous oil and gas companies in the upstream sector of the oil industry and the fact that Shell had substantially de-risked Block 245. To accomodate all these interests, a Resolution Agreement dated 29th April, 2011 between the Federal Government of Nigeria and Malabu Oil & Gas Limited was executed wherein the FGN agreed to resolve all the issues with Malabu in respect of Block 245 amicably and Malabu also agreed that in consideration of receiving compensation from the FGN it would settle and waive any and all claims to any interest in OPL 245.
“In furtherance of the Resolution Agreement, SNUD and ENI agreed to pay Malabu through the Federal Government acting as an obligor, the sum of US$ 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 therefore quite evident from the foregoing that the role played by the Federal Government, its agencies and officials in relation to Block 245 was essentially that of facilitator of the resolution of a long standing dispute between Malabu and SNUD over the ownership and right to operate Block 245. 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 until the resolution of the dispute was concluded.
“The Office of the Attorney General of the Federation had in the recent past reiterated Government’s 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 FGN, its agencies and officials should not be dragged into a purely commercial dispute between Malabu and its purported partners.
“When the Attorney General of the Federation appeared before the House of Representatives Committee, which investigated the transaction, he explained his role in facilitating the settlement and the Committee members were satisfied with his explanations. This was what the Attorney General of the Federation referred to when he stated that the Committee was satisfied with his explanations. The Attorney General of the Federation did not make reference to any ‘Report’ of the Committee, as none, had been made available to him.
“It is therefore clear that the alleged ‘Report’ and the controversy it has generated is a calculated attempt to bring the office of the Attorney General of the Federation and relevant agencies
of Government to infamy because of the principled stance the government took to resolve the dispute in a reasonable fair and equitable manner. The outrage against the Office of the Attorney General of the Federation is understandable when viewed against his refusal to compromise his office in order to satisfy the demands of certain interests and individuals.
“We know those who have compromised their positions in order to author the alleged ‘Report’ and their theatrical display for public gallery. We also know those secretly beating the drums for masquerades dancing in the market square. We shall confront them at the appropriate forum. How else can one explain why the ownership of shares in a private company would generate sufficient interest among members of the legislature so as to merit a resolution of a Committee that certain persons or companies are entitled to ownership of shares in a private company, when the Courts are the appropriate venue for the ventilation of such disputes between share holders (if any).
“Finally, we wish to assure Nigerians that the Office of the Attorney General of the Federation did not act contrary to public interest in facilitating the settlement and at all times material to the transaction, ensured that the settlement was conducted in the best interest of all parties in order to achieve a reasonable, fair and equitable outcome. The Attorney General of the Federation is therefore ready to be subjected to any transparent investigative process in order to unearth the truth”.