The British police are probing an allegation that a $1.3 billion Nigerian oil bloc deal involving Royal Dutch Shell and Italy's Eni SpA may have involved money laundering. Most of the money was allegedly paid to a company linked with Nigeria’s former Minister of Petroleum Dan Etete. Nigerian President General Sani Abacha appointed Etete Minister of Petroleum in March 1995 and he served in that role until 1998, when he went into exile following Abacha’s death. In 2007 Etete was convicted of money laundering in France.
Last week a British High Court issued a judgment, Shell and its by-then-partner ENI paid the federal government $1.3 billion, including a $207 million signature bonus paid into a government account, in return for the right to operate the offshore OPL 245 bloc concession. A Shell subsidiary paid the signature bonus, and an ENI subsidiary paid the $1.1 billion balance. The court further ruled that convicted felon Etete should pay at least $110.5 million to Emeka Obi, the owner of Energy Venture Partners for helping him facilitate the sale of OPL-245.
According to the tangled story presented in court, Etete had in his capacity as Minister of Petroleum in the Abacha administration in 1998 awarded the OPL 245 concession to Malabu Oil and Gas Ltd, a company in which he allegedly had interest, for a payment of $2 million. Malabu Oil and Gas Ltd was registered on 24 April 1998, five days before Etete awarded OPL 245 to the firm. Three months later Abacha died.
Abacha's son Mohammed and other Abacha cronies were also alleged to be shareholders in the company. After Abacha’s death the administration of President Olusegun Obasanjo subsequently cancelled the concession, considering the transaction was lacking transparency and due process. Scrutiny of Etete’s activities as Oil Minister increased when the Obasanjo administration filed a complaint with international financial review agencies asking for help in tracing over $386 million that disappeared from the Central Bank of Nigeria from 1994 to 1998, adding that another $800 million was missing, with Abacha family members strongly suspected to have profited from the theft of the funds. During the subsequent investigation, millions of dollars in Switzerland, France, Gibraltar, the British Virgin Islands and several other tax havens traced accounts held by Etete. Etete told investigators that he was one of the largest ship-owners in Nigeria but that the corruption accusations against him were initiated by Obasanjo in an effort to deprive him of the OPL 245 oil bloc concession which Abacha awarded to his Malabu Oil and Gas Ltd.
During the London court proceedings Etete told the court in a breach of contract suit brought against him over the sale of the OPL 245 oil bloc that he only made $250 million working as a consultant for Malabu Oil and Gas Ltd., testifying, “I put my blood, I put my life into this oil bloc,” even as he denied ownership of OPL245. When presented with a transcript of a recording where he said, “It’s my bloc,” Etete claimed that the transcript was inaccurate.
In London a police spokesman speaking on condition of anonymity said, "The Metropolitan Police's Proceeds of Corruption Unit is investigating allegations of money laundering related to the oil bloc."
The U.K. based energy campaign organization Global Witness director Simon Taylor said, “From Global Witness’s point of view, the decision before Court effectively came down to whether or not to give cash to a crook who had stolen the block worth over a billion dollars from the Nigerian people, or to the middleman who claims he brokered the deal to sell it on.
Given that there are serious unanswered questions about the legality of OPL-245 deal, and the way it was put together, it is surely a scandal that the Court’s only consideration was where to send the money. The first question that should have been considered and fully investigated is to the legitimacy of the deal in the first place.”
By. John C.K. Daly of Oilprice.com