An ad-hoc committee of the House of Representatives has recommended the revocation of the controversial sale of Oil Prospecting Licence 245 to Shell Nigeria Exploration and Production Company and Nigeria Agip Exploration and Production Limited in a deal worth over $1.09bn.
The lucrative oil well was originally allocated to Malabu Oil and Gas Limited, an indigenous firm incorporated in 1998.
But, in a deal facilitated by the Federal Government in 2011, Shell Nigeria Exploration and Production Company and Nigeria Agip Exploration Limited reportedly paid off Malabu and effectively took over control of 100 per cent holding of OPL 245.
A former Minister of Petroleum Resources, Chief Dan Etete, was a major stakeholder in Malabu Oil and Gas Limited.
The House committee noted that in a dispute resolution agreement entered into between SNEPCO, NAE and Malabu, the oil block was transferred to the two foreign firms with the Federal Government acting as the obligor.
There was another Production Sharing Contract between the Nigerian National Petroleum Corporation and Shell Nigeria Ultra Deep on the oil well dating back to December 2003.
The $1.09bn deal came to the notice of the House in December 2012, following which it mandated its ad- hoc committee headed by the Deputy Majority Leader, Mr. Leo Ogor, to investigate it.
The committee found out that the transaction was in breach of the 1999 Constitution (as amended), the Petroleum Act and the indigenous concession policy guiding the sale of oil blocks in the country.
A copy of the committee’s report, which was obtained by The PUNCH on Monday, noted for instance that Agip could not satisfactorily explain how it became a party to the dispute resolution agreement.
“They (NAE) insisted that they did not buy any interest in OPL 245, but ended up having 50 per cent equity in the block, and at the same time, a signatory to the dispute resolution agreement. This is worrisome,” the committee stated in the report.
According to the report, the transfer of ownership of the oil block ceded Nigeria’s national interests to foreigners at huge costs.
It stated, “Indeed, Clause 17 of the resolution agreement commits the Federal Government to indemnify, and even defend SNUD, SNEPCO and NAE from and against all suits, proceedings, claims, demands, losses and liability of any nature or kind, including but not limited to all litigation costs, attorney’s fees, settlement payment, damages and all other related costs and expenses, based on, arising out of, related to or in connection with the resolution agreement and or the issuance of the OPL 245.”
The committee called for the cancellation of the agreement and asked the Federal Government to facilitate a new one that would comply with the Petroleum Act and the indigenous concession agreement of the government that guided the initial allocation of OPL 245 to Malabu Oil and Gas.
It added that “the situation where the (current) resolution agreement diverted 100 per cent of the beneficial ownership to two foreign-based firms is contrary to our national aspirations.”
The report particularly criticised SNUD (Shell) and Agip for not exhibiting transparency in the deal and advised the House to censure the two firms.
The recommendation on Shell and Agip reads, “That Agip be formally censured or reprimanded by the House for its role in the resolution agreement, which lacked transparency and did not meet international best business practices.
“The resolution agreement was meant to resolve existing disputes between the various parties, which even by Agip’s acknowledgement, they are not party to the disputes. In the process, they cornered 50 per cent equity in OPL 245.
“SNUD be censured or reprimanded by the House for lack of transparency and full disclosure in its bid to acquire OPL 245.”
The panel also directed the Nigeria Police to take over the ongoing investigation into the allegation of “forgery and alteration of documents indicating that some Malabu Oil and Gas Limited directors resigned their positions or transferred their appointments or shares without their authorisation, and initiate prosecution of any person indicted.”
The committee’s report has already been laid before the House and may be made public for consideration by members on Tuesday (today).
