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Deduct N27bn from $2bn you owe us, oil marketers tell FG

Oil marketers on Thursday asked the Federal Government to deduct the N27bn they owed the Nigerian National Petroleum Corporation from the $2bn that it owed them.

The marketers stated that the petrol scarcity being experienced across the country would have been averted if the NNPC had listened to their warnings in October that there was a drop in supply of Premium Motor Spirit (petrol).

On Wednesday, the NNPC attacked the Depot and Petroleum Products Marketers Association over the statement by DAPPMA that its members had no petrol in their tanks despite the corporation’s claims of importing millions of litres of petrol.

The national oil firm also stated that DAPPMA members owed it the sum of N26.7bn for products received from it, adding that the statement credited to the association on the fuel supply situation, especially PMS, was very unfortunate.

But while speaking on a television programme monitored by our correspondent in Abuja on Thursday, the Executive Secretary, Major Oil Marketers Association of Nigeria, Mr. Obafemi Olawore, asked the government to deduct the marketers’ debt from the $2bn it owed the oil dealers.

He said, “I know they (NNPC) were referring to DAPPMA, but talking about who is owing who, this is all about trade; we are always buying from the NNPC to sell. So sometimes, we owe and other times we are in credit, but the truth is that the government is owing us.

“And we have agreed with the government since June that when you (government) are going to pay us, deduct whatever we are owing you. Collectively, marketers in the industry are owed close to $2bn, so you can’t compare it to N27bn. It is not only the NNPC that we are owing.”

He added, “We owe other government agencies, but we are saying that let’s start from the biggest and that is the fuel subsidy, the interest and the foreign exchange. We’ve done several reconciliations supervised by the Chief of Staff (to the President) and the Federal Ministry of Finance.

“So nobody is saying we are not owing, rather the government is owing us more and they should pay us and deduct whatever we are owing them.”

When asked why oil marketers were hoarding and diverting petrol as claimed by the Group Managing Director of the NNPC, Dr. Maikanti Baru, the MOMAN spokesman stated, “I wish we could meet face-to-face and I will tell him (Baru) when the problem started and when we started warning.

“I’d stated in the past that if you leave the NNPC as the sole importer of products, you will get to a point where the slightest shock will create a problem. The truth must be told, they (NNPC) are just getting the supply in some appreciable quantities. The supply dropped in October up until some two, three weeks ago; that’s the truth!”

Olawore added, “Supply into the system dropped and somebody must own up to this. I’m not here to pass any blame; we are here to see how we can solve the problem and after that, we can sit at the table to look at what went wrong and how to prevent it from happening again. But we all saw it coming.

“We saw it coming and we said it that your suppliers are defaulting; they are not supplying enough.”

NNPC lied, we didn’t owe it – DAPPMA

Meanwhile, DAPPMA on Thursday accused the NNPC of lying when it claimed that its members owed the national oil firm N26.7bn.

According to DAPPMA, its members have in the past one month paid over N90bn for petrol supply but have yet to receive any cargo from the Petroleum Products Marketing Company, a subsidiary of the NNPC.

The Executive Secretary, DAPPMA, Mr. Olufemi Adewole, said it was unfortunate for the national oil firm to attack and accuse marketers falsely.

In a statement signed by Adewole on Thursday, the association said, “It is an undisputable fact that DAPPMA members have paid for petrol supply (with bank funds) for over one month, the value of which is in excess of N90bn, yet the PPMC/NNPC had no cargo to allocate to them. As such how can we be held responsible for hoarding?

“The PPMC/NNPC does not transact business with DAPPMA members on credit; hence, we are not aware of any indebtedness to the PPMC/NNPC by our members. We again reject any attempt to blame marketers for the shortfall in supply as it is not our making since the NNPC has been the sole importer since October 2017.”

Adewole said marketers had continued to sacrifice to keep the country wet with fuel despite over N600bn debt owed DAPPMA members and over N800bn owed the different marketers’ groups as a whole by the Federal Government.

He stated, “The essence of our initial press release was to shed light on salient issues surrounding the shortfall in current petrol supply, which is presently solely handled by the NNPC. It was not an attempt to join issues with the PPMC/NNPC with whom we are partners.

“The NNPC’s view of our press release stating our side of the story and seeking to defend marketers for the very first time against the unwarranted accusations of hoarding and profiteering is rather unfortunate.”

The association, however, assured Nigerians that all possible steps were being taken to cooperate with the PPMC/NNPC to eliminate fuel queues nationwide in the next few days.

Amidst the confusion, queues by motorists for petrol in Abuja and neighbouring states of Nasarawa, Niger and Kaduna failed to disappear, as some filling stations were said to be collecting illegal “gate fees” before allowing vehicles to drive in to purchase PMS.

In Lagos, the Director, Department of Petroleum Resources, Mr. Mordecai Ladan, commended the load-out history of Nipco Plc since the resurgence of petrol scarcity across the country, with the firm increasing the trucking of the product across the country.

The DPR boss, who made an unscheduled visit to the Nipco terminal in Apapa on Thursday, said he was impressed with the load-out and the assurances by the company’s management on hitch-free product loading as supplies from the NNPC improved significantly.

Mordecai, who was received by the company’s Chief Operating Officer, Mr. Suresh Kumar, and the Chief Corporate Affairs Manager, Mr. Taofeek Lawal, said his team was on tour of depots to ascertain the availability of product stocks.

Earlier, Lawal had informed the DPR team that the company had in stock 17,000 metric tonnes of petrol or approximately about 23 million litres courtesy of supply by the NNPC via the Apapa jetty on Wednesday.

Oil price crosses  $65 per barrel mark


Brent crude oil price s jumped above $65 per barrel after the shutdown of the Forties North Sea pipeline knocked out significant supplies from a market that was already tightening due to OPEC-led production cuts.

Brent crude futures on Tuesday, the international benchmark for oil prices, were at $
65.07 dollars a barrel at 0211 GMT.

U.S. West Texas Intermediate (WTI) crude futures were at 58.21 dollars a barrel.

Britain’s Forties oil pipeline, the country’s largest at a capacity of 450,000 barrels per day (bpd), shut down on Monday after cracks were revealed.

“The market reaction shows that in a tight market, any supply issue will quickly be reflected in higher prices,” said ANZ bank.

The jump in Brent prices widened its premium to WTI prices, making U.S. oil exports more attractive.

Nigeria’s oil revenue exceeds 2017 benchmark by 18% – NNPC

The Nigerian National Petroleum Corporation (NNPC) says oil revenue in the first ten months of the year exceeded the 2017 budget oil benchmark of $44.50 per barrel by 18 per cent.

Ndu Ughamadu, NNPC’s spokesperson, made this known in a statement on Monday.

Mr. Ughamadu said that the corporation’s Group General Manager, Corporate Planning and Strategy, Bala Wunti, disclosed this during a presentation to the House of Representatives Joint Committee on 2018-2020 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP).

The disclosure, the statement said, revealed that oil has sold at an average of $52.49 per barrel between January and October, adding that the 18 per cent recorded above budget benchmark was due to stability in the crude oil markets and various geopolitical dynamics around the world.

The statement also explained that the federal government’s oil production target of 2.3 million barrels per day (mbd) in the 2018 budget was realistic and achievable, adding that the price projection of $45 per barrel was conservative and based on price scenarios of $35 at the lowest, $45 at the medium and $55 at the highest.

Mr. Wunti, the statement said, stressed that most price forecasting agencies were of the view that the medium price scenario had the highest probability of occurrence on which the 2018 budget was hinged upon.

The NNPC official added that the current production capacity in the country was more than 2.3mbd but due to the insecurity in the Niger Delta region, full production capacity had not been achieved over the years.
“The 2018 crude oil national production projection for the joint ventures, modified carrier arrangements or external financing, production sharing contracts, independents, marginal fields and service contracts is about 2,298,000 barrels per day,” he said.

The statement noted that Mr. Wunti expressed worry about oversupply of oil in the international market, adding that the outlook for the market was reassuring given the positive global economic growth and improved compliance by member countries of the Organisation of the Petroleum Exporting Countries (OPEC) and Non-OPEC members with production cuts.

On crude oil production from January to October 2017, Mr. Wunti stated that average output stood at 1.885mbd, put at 86 per cent of the budgeted target of 2.2mbd.

He, however, blamed the shortfall on Niger Delta security-related factors and vandalism of key export infrastructure, including the Trans-Forcados Pipeline (TFP), Forcados Oil Terminal (FOT) export line, Nembe Creek Trunk Line (NCTL) and Trans Niger Pipeline (TNP).

NNPC to announce core investor for Benue bio-fuel project soon — Baru


The Nigerian National Petroleum Corporation (NNPC) says it has almost concluded discussion on the choice of a core investor for the proposed bio-fuel plant in Benue.

The Group Managing Director of the corporation, Dr Maikanti Baru, said this in a statement issued by Mr Ndu Ughamadu, NNPC Group General Manager Public Affairs Division in Abuja on Sunday.

Baru, after a follow-up meeting with a Benue State delegation led by Dep. Gov. Benson Abounu, said arrangements had been finalised to name the prospective investor in the weeks ahead.

Represented at the meeting by the Chief Operating Officer, Ventures Directorate, Dr Babatunde Adeniran, Baru explained that the core investor would provide 70 per cent of the required funding for the project.

According to Baru, the Benue State government and the NNPC will take up the balance equity contribution.

He said upon completion, the plant was projected to generate about one million direct and indirect jobs for the populace, noting that the project would help link the energy sector with the agricultural sector through the commercial production of bio-fuels from selected energy crops.

The NNPC boss listed other components of the project to include a sugar cane feedstock plantation of about 20,000 hectares; a cane mill and raw/refined sugar plant capable of producing 126,000 tonnes annually.

According to him, it also includes a fuel-ethanol processing plant with production capacity of 84 million litres annually.

“The bio-fuels projects will also help to establish the bio-gas cogeneration power plant which will generate 64 MW; a carbon dioxide recovery and bottling plant that will produce 2, 000 tonnes annually as well as an animal feed plant that will produce 63, 000 tons annually.’’

The statement also quoted Abonu, Benue deputy governor as saying “Benue State is offering the 20, 000 hectares of irrigable land space along the bank of the river Benue as its equity contribution to the project’’.

“In addition to a yet to be specified tranche of funds to shore up its stake to the level of directorship in the yet to be constituted board.’’

Abonu also commended the NNPC on the strides so far recorded, and assured that the state government had since taken concrete measures to sensitise the host communities on the bio-fuel project.

According to the deputy governor, the state government has also sensitised host communities to ongoing effort by the corporation for fresh hydrocarbon found in the Benue trough.

NNPC: 34 firms bid for pipeline security services

As part of efforts to consolidate on the successes recorded in the steady supply and distribution of petroleum products across the country, the Nigerian National Petroleum Corporation (NNPC) has mapped out strategies to boost security around its depots and pump stations to ensure they remain functional.

Managing Director of the Nigerian Pipeline and Storage Company (NPSC), Mr. Luke Anele, stated this during a bid opening exercise for the selection of firms to provide security services at the company’s depots and pump stations across the country, a statement from the NNPC said today.

Represented by the NPSC’s Executive Director in charge of Pipelines, Mr. Danladi Ahmed, the MD stated that the NPSC was desirous of engaging reputable and competent security firms to safeguard its critical assets to ensure unimpeded operations and efficient service delivery.

“This particular exercise avails us the opportunity to identify competitive offers from companies that are competent and ready to secure our assets such as depots and pump stations at competitive rates. The NPSC assets are wide spread nationwide, which means security is important, if you have anything of value, you must provide security to safeguard it,” Mr. Anele stated.

NPSC is a midstream subsidiary of the NNPC in charge of depots and pipelines.

The MD stated that the bid opening was conducted openly in the full glare of representatives of the bidding companies to demonstrate the NNPC’s commitment to transparency and due process in all its activities.

He assured the bidders of a level playing ground that would guarantee the emergence of the best companies among them.

A cross section of participating companies who witnessed the event expressed their satisfaction with the conduct of the exercise, describing the Corporation as a transparent company that operates according to the dictates of best global standards.

Mr. Dozie Tassie who represented Pentagon Securities Ltd, described the bidding process as credible and satisfactory, adding that everybody was given the opportunity to compete fairly.

“NNPC demonstrated that it was committed to global best practices. Now that everybody has been given the opportunity to verify that the documents they submitted were not tampered with and the names of participating companies are made known, there won’t be cases of people raising eyebrows when winners emerge because they have witnessed the process and could testify that no company was smuggled in. NNPC is doing a fantastic job, it is a step in the right direction,” Mr. Tassie enthused.

While applauding the efforts of the NNPC GMD, Dr. Maikanti Baru, the Managing Director of Goldlight Security Ltd, Chief John Eke, stated that he saw transparency and due process in action during the bidding exercise.

“What I have seen today gladdens my heart. There is due process and transparency in place. The GMD and the MD, NPSC and those involved in the entire process deserve commendation. In fact, it shows that the NNPC is going places” a highly elated Eke stated.

A total of 34 firms bidded for the security services out of the 54 companies that were invited for the jobs through selective tendering.

The public opening of bid is part of the Corporation’s commitment to transparency as a Focused, Accountable, Competitive and Transparent organisation, conducting its business with Integrity (FACTI).

Crude won’t be an income resource in 10 years – Kachikwu

The Minister of State for Petroleum Resources, Dr Ibe Kachikwu, says the world is moving away from oil, hence, it will no longer be an income resource in 10 years’ time.

Kachikwu said this in Abuja on Thursday while answering questions on “His Outlook for the Commodity in 2018”.
According to him, 2018 looks like a better year for crude in terms of pricing but countries are focusing on alternative energy.

“Everything all added up together is showing us that towards the last quarter of 2018 we expect a better market. Does that better market translate to your 100 dollars price (per barrel)?

“Never! I don’t see it, frankly I don’t see it. It’s going to take a major calamity. Largely because on the back of all these, countries are racing away from oil.

“If Europe is saying in five years time, `we are going to exit oil cars to electric cars’, oil, therefore, is getting its last years.

“Except for those who produce and use it for local consumption because they’re moving slowly away from it but in terms of an income resource, you can begin to count the years in your hands.

“In 10 years’ time, I’d be very surprised if any country that hasn’t diversified enough is counting really seriously on oil,’’ he said.

On outlook for price of crude by year-end, the minister said “this year, maybe 60 dollars per barrel but I don’t think it’s going to happen, so let’s say mid 50 dollars.

“If I get 55 dollars per barrel at the end of the year, I’m contented and by late 2018 60 dollars,’’ he said.

Kachikwu said private investment was the only way out of bad infrastructure and better income for government in the sector.

“Pipelines, infrastructure, whether it is gas whether it is crude; there is absolutely no way you can have this country get away from these inefficiencies we see.

“Unless we get the private sector build pipelines, build infrastructure, tariff those infrastructure, then you’ll suddenly see the books of NNPC, government income, stability would all improve.

“More jobs would be created; you’ll have gas to power much easier.’’

According to Kachikwu, as of today, Nigeria has hit 7,000 megawatts of electricity but only has the capacity to distribute about 4,000.

“This means we have about 3,000 megawatts sitting there. What does it take? Infrastructure, so we’ve got to step out. All over the world, state by state you have about two or three power providers.

“They run their metering, charging the right tariffs for it, life goes on and they can do their investment in terms of generating the power.

“So they’re fundamental things that we need to do, especially in the oil industry but we are being very constrained.’’

He said if Nigeria had three, four or five Dangotes building refineries, the equation would change, as focus would shift from scarcity to export, thereby bringing down price.

On militancy, he said “militancy is in two directions: there’s criminal militancy and political or philosophical militancy.
“The ones we’ve tried to deal with are the philosophical militants where people are angry because of neglect.

“So, the 20-point agenda and all the things we are doing are geared towards getting a sense of belonging, fairness, development.

“There are, however, individuals who do it for quick gain, no matter what we do, you will always have people who puncture pipelines because it’s easy money.’’

He said although the government was sometimes handicapped by cash, time, tolerance levels on delivery of promises, continuous engagement and honesty had brought understanding between both parties.

Also, he said addressing militancy issues varied from state to state.

“In some states, the militants just want to go to school; some are graduates but just need to work; some are angry that they are not given opportunities to work with the oil companies.

“So, sitting down with the local governments and agreeing on what to do and the way forward makes both parties happy.’’
On the promised modular refinery to each state in the region, he said two investors had shown interest and had begun to ramp up.

“There’s no barrier as to how many modular refineries in a state. It’s subject to availability of crude.

“My dream under this new concept is to see at least two per state actually begin well-funded, well-established, well-located, everything in place and they are actually beginning to build.

“Challenges to modular are that an average modular is about 20 million dollars; you need to have the right partners, right crude supply.

“On this, we just recently sent a team to Russia in connection with the modular refineries.’’

He said current production was 1.6 million barrels per day but with recent fluctuations, it was inevitable that Nigeria would get more crude-cut exemptions from the Organisation of Petroleum Exporting Countries.

We don’t see a penny from crude sales, says NNPC GMD


Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Dr Maikanti Baru, says the oil firm does not “see a penny” from the sale of crude oil.

Baru said this in response to some critical reports, especially from the Nigeria Extractive Industries Transparency Initiative (NEITI).

In its March 2017 policy brief, NEITI said by its own calculations, the total unremitted revenues to government’s treasury by NNPC and Nigerian Petroleum Development Company (NPDC) stood at about N7.2 trillion.

But speaking in an interview with the quarterly magazine of the oil firm, Baru accused NEITI of being naïve.

“Unfortunately, some of our sister agencies like NEITI go to the press quite easily to talk about massive unremitted funds and that NNPC owes government but if you look at the issues related to crude sales, NNPC does not see a penny from crude sales,” he said.

“What it sells on behalf of the federation goes into an account controlled by the Central Bank of Nigeria (CBN) and of course into the federation account. We don’t have a cheque book to sign off on that, we only have a viewing right, whereby whenever payments are done, we are informed so that as the entity in charge of sale of crude on behalf of government, for us to know that payment has been done before we implement necessary release of the cargo.

“So, NEITI is a bit naïve on those things.”

Baru also accused the oil industry revenue watchdog of mixing up accounts, citing an instance to buttress his point.

“They (NEITI) also mix up accounts. For instance, the Nigerian Petroleum Development Company (NPDC) is a 100% owned entity of NNPC and as such the proceeds of its crude oil is for NPDC and NNPC not for the federation account but NEITI mixes up that to say that we are supposed to pay those crude and gas sales from the NPDC into the federation account,” he said.

“So, they come up with mind boggling figures, claiming that NNPC is taking monies supposedly meant for the federation account.”

Baru also spoke on the targets of the NNPC and the steps being made to realise them.

“We want to consolidate the gains we have made and in fact improve on what we have already done and the aggressive targets we set for ourselves,” he said.

“We are looking at growing our reserves to 40 billion barrels. And also increasing our production from the current two million barrels per day to three million barrels per day by 2020. We also want to increase direct production from NPDC to ramp up to at least 500,000 bpd production by that time.”

Production nosedives 70% at Lagos Aje oilfield

New data from Nigerian National Petroleum Corporation (NNPC), the oil production arm of Africa’s largest economy by gross domestic product, show that the country’s newest oil field at Aje, offshore Lagos, owned by Yinka Folawiyo Petroleum Company Limited, has seen production fall by as much as 69 percent in nine months.

The production fell from 185,104 barrels in July 2016 to 58,082 barrels in March this year.

It declined from 159,473 barrels in August to 116,157 barrels in September; 99,775 barrels in October, and 93,034 barrels in November. No production figure was provided for the month of December, 2016, data seen by Businessamlive show.

The Aje field’s production further dropped to 65,323 barrels in January and 54,322 barrels in February this year, according to the NNPC data.

Panoro Energy, one of the partners, recently said production from the field had continued to be limited by mechanical problem associated with the completion of one of the wells in the Aje oil field.Image result for Yinka Folawiyo Petroleum Company Limited

It said the Aje-5 well required subsurface intervention to address the problem, adding that a rig was contracted to re-enter the well and remedy the downhole problem through cement squeeze.

Yinka Folawiyo Petroleum Company Limited, a wholly owned indigenous company, is the operator of Oil Mining Lease 113, where the field is located.

Other partners are Panoro Energy, New Age Exploration Nigeria Limited, EER (Colobus) Nigeria Limited and PR Oil & Gas Nigeria Limited.
The company and its partners achieved first oil on the field in May last year. Aje is an offshore field located in OML 113 in the western part of Nigeria in the Dahomey Basin.

The field is situated in water depths ranging from 100 to 1,000 metres and is about 24 kilometres from the coast. It contains hydrocarbon resources in sandstone reservoirs in three main levels – a Turonian gas condensate reservoir, a Cenomanian oil reservoir and an Albian gas condensate reservoir.

The joint venture partners had in October 2014 taken the final investment decision to develop the first phase of the field.

Yinka Folawiyo Petroleum was granted the Oil Prospecting Licence 309 in June 1991 as a sole risk contract under the Federal Government’s Indigenous Allocation Programme, which was put in place to encourage the development of a locally-owned and operated Nigerian upstream oil industry.



Malabu Oil deal: Court to hear Shell, Agip case Feb 27

The January 26, 2017 court orders granting temporary control of the Oil Prospecting Licence (OPL) 245 to the Federal Government of Nigeria following application by the Economic and Financial Crimes Commission (EFCC), may not go unchallenged.

The challenge of the orders by Shell Nigeria Exploration and Production Company (SNEPCO) Limited and Nigeria Agip Exploration Limited, two multi-national companies involved in the Malabu Oil deal, will be heard by the court on February 27.

Shell and Agip had filed applications seeking the vacation of both orders, arguing that the court was misled into granting the order.

When the case was called Tuesday before Justice John Tsoho of the Federal High Court, Abuja, lawyers to Shell and Agip – Konyinsola Ajayi (SAN) and Babatunde Fagbohunlu (SAN) – informed the court about their pending applications.

Lawyer to the EFCC, Jonson Ojoggbane confirmed that both applications were served on him, but that he was yet to respond to them. He sought a short adjournment to enable him address the applications and put forward the EFCC’s position to enable the court reach a just conclusion.

Although Ajayi and Fagbohunlu agreed to come back next week, the judge informed parties about his official engagement next week outside the country. He adjourned to February 27 for hearing of the applications.

The proceedings were witnessed by some individuals linked to the Malabu deal, including son of the late general Sani Abacha, Mohammed, businessman, Otunba Oyewole Fasawe, among others.

The order, obtained ex-parte by the EFCC, among others, allows the Department of Petroleum Resources (DPR) to manage the OPL 245 on behalf of the Fed Government, pending the conclusion of investigation and prosecution of “SNEPCO, Agip and other individuals named in connection with acts of conspiracy, bribery, official corruption and money laundering,” contained in some charges already filed in court.

The orders granted are that:

*An interim order attaching the property known as Oil Prospecting Licence (OPL) 245 pending the conclusion of investigation and prosecution of Shell Nigeria Ultra Deep Ltd, Shell Nigeria Exploration and Production Company (SNEPCO) Ltd, Nigeria Agip Exploration Ltd, Malabu Oil and Gas Ltd and other individuals named in connection with acts of conspiracy, bribery, official corruption and money laundering.

*An interim order directing that the property known as OPL 245 be managed by the Department of Petroleum Resources on behalf of the Federal Government of Nigeria pending the conclusion of investigation and prosecution of Shell Nigeria Ultra Deep Ltd, Shell Nigeria Exploration and Production Company (SNEPCO) Ltd, Nigeria Agip Exploration Ltd, Malabu Oil and Gas Ltd and other individuals named in connection with acts of conspiracy, bribery, official corruption and money laundering.

The EFCC had, while applying for the order, gave detailed explanation of the alleged role played by Shell and Agip in the Malabu Oil deal, through which some highly placed Nigerians, including ex-Ministers and multinational oil companies purportedly defrauded the country of billions of dollars.

The commission also revealed how former Attorney General of the Federation (AGF), Mohammed Adoke allegedly aided the payment of $1.2b to ex-Petroleum Resources Minister, Dan Etete, using his position in the President Goodluck Jonathan’s government.

EFCC stated, in a supporting affidavit, that: “Sometime in April 1998, Malabu Oil and Gas Limited was incorporated in Nigeria with shareholders namely: Mohammed Sani (fronting for the late General Sani Abacha), Kwekwu Amafegha (representing Dan Etete, the then Minister of Petroleum Resources) and Hassan Hindu (on behalf of Ambassador Hassan Adamu.

“In April 1998 the company was incorporated, the Federal Ministry of Petroleum Resources offered the company deep water oil block prospecting licence in respect of Oil OPL 245 in line with the Federal Government’s indigenous policy in the upstream sector.

“The oil prospecting licence, against all known government’s regulations, was awarded to Malabu Oil and Gas even before a formal application was submitted by the company.

“In June 1998 Gen Sani Abacha died and between 1999 and 2000 the corporate status and shareholding structure were altered severally through forged resolutions, which eventually divested Mohammed Sani of their shares, while new shareholders and directors were appointed fraudulently.

“At the time the company, namely Malaya Oil and Gas Ltd was incorporated, Gen Sani Abacha and Dan Etete were Head of State and Minister of Petroleum Resources, while Hassan Adamu was Nigerian Ambassador to the United State of America between 1996 and 1999,” the EFCC said.

It added that as at when they incorporated Malabu Oil, Gen Sani Abacha, Dan Etete and Hassan Adamu were barred by extant laws from engaging in any form of business by virtue of their offices.

“They used their positions to confer unfair advantage on themselves and cronies in allocating OPL 245 to themselves without due process. The company contracted Shell Petroleum and SNEPCO, in a joint venture scheme, for the purpose of prospecting and operating the said licence given by the Federal Government of Nigeria.

“To the knowledge of Shell, the allocation of the oil well and the procedure adopted by the owners of Malabu Oil and Gas Ltd was fraught with fraud, but went ahead to consummate the transaction.

“Sometime on 2nd July 2001, the Federal Government withdrew the title and allocation of OPL 245 to Malabu Oil and Gas Ltd on the directive of Mr. Funso Kupolokun, the then Presidential Adviser on Petroleum to President Olusegun Obansajo after which same was reallocated to Shell Nigeria Ultra Deep Ltd.

“Malabu Oil and Gas Ltd sued the Federal Government over the revocation, but the suit was later withdrawn and settled out of court by the parties and the said oil well was reallocated to Malabu Oil and Gas Ltd.

“Shell and Agip again went into a fraudulent agreement with Malabu Oil and Gas, in which the companies will pay signature bonus of $210m to the Federal Government of Nigeria, while $1.2b would be paid to the owners of Malabu Oil and Gas Ltd.

“Shell Petroleum was later to explain that the payment was for compensation, but investigation conducted revealed that the money was bribe to Dan Etete and his cronies.

“Shell was aware at the time of consummating this transaction that Dan Etete, the owner of Malabu Oil and Gas Ltd, was already a convict and hence, was not willing to pay the said sum of $1.2b directly to Dan Etete and or Malabu Oil and Gas Ltd directly.

“One Mohammed Adoke was the Federal Government counsel in series of arbitration instituted by Shell in London on the said oil well and, who later became the Attorney general of the Federation, conspired with Shell/Agip to route the payment of the said sum of $1.2b bribe money through Federal Government Escrow Account with JP Morgan Chase bank.

“The said Mohammed Adoke had written a letter ref. No: HAGF/FMPR/2011/Vol. 1/12 dated 9th February 2011 seeking the advice of the Department of Petroleum Resources (DPR) on whether to consummate the transaction involving Shell Ultra Deep Sea, Malabu Oil and Gas Ltd, NNPC, Nigeria Agip Exploration and production Company (SNEPCO).

“The DPR replied in a letter reference No: PILD/880.T dated 1st of April 2011 and advised against the transaction on the ground that it was highly prejudicial to the interest of the Federal Government of Nigeria.

“Despite the advice, the then AGF, Mohammed Adoke approved the payment of the $1.2b bribe money through Federal Government Escrow Account with JP Morgan Chase Bank in London. Sometime in May 2011 Nigeria Agip Exploration and SNEPCO instructed Chase Bank to release $1,092,040,000 into Escrow Account of the Federal Government.

“The money, on the instruction of the then AGF, Mohammed Adoke, was transferred from the Escrow Account to two banks namely, First Bank and Keystone Bank operated by Dan Etete and Malabu Oil and Gas ltd.

“The said amount was later laundered with several accounts of individuals and different companies. Investigation further revealed that the Federal Government was defrauded by SPDC and Malabu Oil and Gas Ltd by under paying $210m as signature bonus on OPL 245.

“Investigation conducted revealed that Malabu Oil and Gas Ltd and SPDC secured OPL245 through fraudulent scheme involving high scale bribery and corruption by top management of the company.

“Information available to the applicant (EFCC) is to the effect that a London judge, sitting in the Southwark Crown Court refused to release to Dan Etete and Malabu Oil and Gas Ltd $85m which is connected to the said fraudulent transaction by Shell Nigeria, Nigeria Agip Exploration and Malabu Oil and Gas in respect of OPL245.

“The $85m formed part of the proceeds of the fraudulent transaction between Shell Nigeria, Nigeria Agip Exploration and Malabu Oil and Gas Ltd. The said sum was seized as a result of request by Italian prosecutors,” EFCC said.