6th March, 2017
Mr. Abubakar Malami, SAN
Honourable Attorney General of the Federation
And Minister of Justice,
Federal Ministry of Justice,
Shehu Shagari Way,
RE: SETTLEMENT OF DISPUTE OVER OWNERSHIP/OPERATION OF OPL 245, BETWEEN THE FEDERAL GOVERNMENT OF NIGERIA, SHELL NIGERIA ULTRA DEEP AND MALABU OIL AND GAS LIMITED
May I respectfully present my compliments and once more draw your attention to the above subject matter, which has continued to engage the attention of the Economic and Financial Crimes Commission (EFCC) culminating in the filing of spurious and malicious charges against me and other named individuals and companies.
2. I am constrained to write you because I had initially sent you a Comprehensive Position Paper that I had prepared as far back as 2013 on the issue when you assumed office. I also indicated my readiness to offer further explanations if the need arose. Having not received such request for additional explanation, my understanding was that you and indeed, the FGN were satisfied with the steps taken to implement the Terms of Settlement and finally resolve the lingering dispute over the ownership/operation of OPL 245.
3. However, recent actions of the Economic and Financial Crimes Commission (EFCC) to impugn the settlement which was done in the national interest particularly their penchant to suppress facts relating to the transaction and the filing of criminal charges against me for conspiracy/ aiding the commission of Money Laundering offence and the latest allegations of bribe taking reveal very clearly that either your Office and that of the EFCC are not working in harmony or that something sinister is going on. Having given you the benefit of the doubt that you would not sponsor deliberate falsehood against me, my suspicion is that there is an orchestrated plot by the EFCC to: deliberately impugn a transaction that has been scrutinized and approved by at least three past Presidents and three Attorneys General; drag my name in the mud and paint me with the tar of corruption in order to attract public odium.
4. As the Chief Law Officer of the Federation, you have a public duty to speak on this matter so that Nigerians would know whether I acted mala fide or abused my office in the entire transaction leading to the final implementation of the Settlement. Nigerians need to know whether your predecessors in office from 2006 to May 2015 acted in the national interest when they brokered and implemented the Settlement. It will also be instructive for Nigerians to know whether your predecessors were carrying out their personal agenda or that their respective actions were carried out with the knowledge and approval of their respective Principals.
5. I believe it is your responsibility to explain to the public who are being sold a fiction that the transaction started from President Olusegun Obasanjo, GCFR under whose administration the Terms of Settlement were brokered with Chief Bayo Ojo, SAN, as the then Attorney General who executed the Terms of Settlement before the tenure of President Goodluck Ebele Jonathan, GCFR who approved the final implementation of the Terms of Settlement and my humble self who executed the resolution agreements. This is more so as the Settlement and its implementation were situated in the Federal Ministry of Justice.
6. Honourable Attorney General of the Federation, your response is crucial because it has become glaring that the actions of the EFCC in respect of the transaction are not in the national interest; but rather in furtherance of a plot to serve the interests of some powerful families and individuals who are aggrieved by my refusal to accede to their requests to compel Malabu to pay them certain sums from the proceeds of its divestment in OPL 245, and the subsequent re-allocation of the Block to Shell/ENI. You will recall that I had on several occasions asserted this fact. I am therefore surprised that a national institution is being used to further the interest of individuals whose claim or shareholding in Malabu remains shady and prefer to engage proxies to fight their battles.
7. The pertinent questions that must be asked are: Why are these powerful families and individuals reluctant to litigate their dispute in the law courts if they are confident about their legal claims to the Shares of Malabu? Why are they intent on using state actors and institutions for their private benefits? Where were they when Malabu was negotiating with the FGN from 2006 to 2011 when the Settlement was finally implemented? Hon. Attorney General, you will be doing Nigerians a great favour by asking the EFCC, the Abacha Family and other powerful individuals involved to answer these important questions.
8. I respect the Office of the Attorney General of the Federation and believe that my responsibility towards you as the occupant of that exalted office is to furnish you with information that would assist you in the discharge of your functions. Therefore, please permit me to retrace the history of the Settlement, once more especially as the EFCC have deliberately excluded vital parts of the transaction from the public space and are only content on dishing out deliberate falsehood to the public.
9. It will be recalled that the Terms of Settlement encapsulating details of the Settlement between the Federal Government of Nigeria (FGN) and Malabu Oil & Gas Limited (Malabu) was executed on 30th November 2006. The Terms of Settlement, which was later, reduced into a Consent Judgment of the Federal High Court; Abuja was brokered by our predecessor in office, Chief Bayo Ojo, SAN and signed on behalf of the Federal Government of Nigeria by the then Honourable Minister of State, for Petroleum Resources, Dr. Edmund Daukoru, during the administration of President Olusegun Obasanjo, GCFR.
10. When I assumed office on 10th April 2010, I inherited a Consent Judgment, which had undergone the scrutiny of three Presidents and Attorneys General. I was therefore restricted to the implementation of the Settlement as the issue of ownership of OPL 245 had already been resolved in favour of Malabu by the Terms of Settlement dated 30th November 2006 and the Consent Judgment of the FHC, Abuja. I also inherited an on-going Investor/State Arbitration at the International Centre for the Settlement of Investment Dispute (ICSID) in which SNUD had initiated arbitral proceedings against the FGN claiming damages in excess of $2 Billion for taking back OPL 245 re-awarded to them when Malabu’s title was initially revoked by the FGN. SNUD’s claims were also premised on the fact that they had substantially de-risked the Block.
11. It will be recalled that in furtherance of the Indigenous Exploration Programme Policy introduced by the Federal Government in the early 1990s to encourage effective development of indigenous capability in the upstream sector of the oil industry, Malabu and other indigenous Oil and Gas companies were allocated Oil Blocks which they were expected to develop in partnership with international oil companies as Technical Partners.
12. Malabu 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.
13. 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 invited in April 2002 to bid for OPL 245 despite 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, its technical partner.
14. 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 apposite 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.
15. 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 lodged 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 the Appeal. (Copy of the Terms of Settlement dated 30th November is attached as Annexure ‘A’)
16. 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 in Washington DC, and made representations to government on the impending arbitration. It is instructive to note that SNUD’s claim before ICSID was in excess of US$ 2 Billion. It also commenced a suit against the Government before the Federal High Court, Abuja. (Copy of SNUD’s Claim before ICSID is attached as Annexure ‘B’)
17. 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, during the administration of Late President Umaru Musa Yar’Adua GCFR without success.
18. It is also important to note that SNUD had entered into a Production Sharing Contract with the NNPC in 2003 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 $209 Million US dollars in an Escrow Account with J.P. Morgan jointly managed by the Federal Government of Nigeria and SNUD pending the resolution of the dispute between Malabu and the Federal Government.
19. In 2010, when the administration of President Goodluck Ebele Jonathan, GCFR came to office, Malabu again, petitioned the Federal Government to implement the terms of the out-of-court settlement of 30th November 2006 on the basis of which they had discontinued their Appeal. (Copy of Malabu’s Petition is attached as Annexure ‘C’). Government also took cognisance of the pending cases instituted by SNUD against Federal Government of Nigeria (FGN) and/or Malabu, including Bilateral Investment Treaty (BIT) arbitration No. ARB/ 07/18 pending at the International Centre for the Settlement of Investment Disputes (ICSID Arbitration) to enforce SNUD’s rights to exclusively operate Block 245 as Contractor on the basis of the 2003 PSC between NNPC and SNUD and the financial implications of defending these actions on the public purse and opted for amicable resolution of the dispute.
20. To resolve all the contending claims in a satisfactory and holistic manner, due regard was given to the Terms of Settlement of 30th November 2006 which had been reduced to Orders of the Court, the underlying policy of encouraging the participation of indigenous oil and gas companies in the upstream sector of the oil industry and the fact that Shell had substantially de-risked Block 245. To accommodate all these interests, a Resolution Agreement dated 29th April, 2011 was executed wherein the FGN agreed to resolve all the issues with Malabu in respect of Block 245 amicably and Malabu also agreed that it would settle and waive any and all claims to any interest in OPL 245. (Copy of the Resolution Agreement is attached as Annexure ‘D’).
21. In furtherance of the Resolution Agreement, SNUD and ENI agreed to pay Malabu through the Federal Government acting as an obligor, the sum of US$ 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).
22. 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.
23. I wish to reiterate that the resolution of the lingering dispute over Block 245 was in furtherance Government’s demonstrable 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 Office of the Attorney General superintended over the process to ensure that the implementation was holistic by ensuring:
(a) that the requisite Presidential Approvals were sought and obtained;
(b) that all the relevant MDAs such the Ministry of Petroleum Resources, Ministry of Finance, the Department of Petroleum Resources (DPR), and the Nigerian National Petroleum Corporation (NNPC) were involved in the resolution and final implementation of the Settlement;
(c) that the relevant Agreements such as OPL 245 Resolution and Re-allocation Agreements were duly executed by line Ministers and Departments;
(d) that the Signature bonus was duly paid to the Federal Government of Nigeria as required by law, and
(e) that disbursements from the escrow account were jointly approved by the Federal Government and SNUD.
24. In view of the foregoing, I anxiously want to know where I went wrong that I have been singled out by the EFCC for prosecution. I also want to know the effect of section 5 of the Constitution of the Federal Republic of Nigeria, 1999 as amended with respect to the vesting of all the Executive powers of the Federation in the President to exercise by himself and or through his Ministers and appointees. What is the effect of section 5 of the Constitution on persons who act pursuant to lawful Presidential approvals? This is more so as two out of the three Presidents that had the opportunity to scrutinise this Settlement (Presidents Obasanjo and Jonathan) are alive. Have they disowned the Settlement? Has our predecessor in Office, Chief Bayo Ojo, SAN distanced himself from the Settlement he brokered?; Have the Honourable Ministers of Petroleum Resources and Finance at the time of implementation of the Settlement (Mrs Diezani Allison-Madueke, CON and Dr. Olusegun Aganga, respectively) disowned the Settlement or their signatures? It is my respectful view that Nigerians deserve answers to these questions as it will help them and my humble self to understand the actions and the machinations of the EFCC masquerading to be acting in the national interest while surreptitiously deploying state resources and machinery to promote the personal agenda of their cohorts.
25. Finally, I wish to use this medium to appeal to the Honourable Attorney General of the Federation to be mindful of his overarching powers over public prosecution and the need to ensure that state institutions do not become persecutors or instruments in the hands of those pursing personal vendetta. The Constitution and the traditions of our noble profession demand your oversight over public prosecution. Consequently, if you find that I had breached my Oath of Office or abused my office, please do not hesitate to bring me to justice. However, if it is the contrary, as I strongly believe, that certain individuals who had vowed to even scores with me are now being aided by state institutions such as the EFCC; I deserve protection from these unwarranted attacks and dehumanising treatment that I am being subjected to merely because I chose to serve my fatherland.
26. Please accept, Honourable Attorney General of the Federation, the assurances of my highest regards and esteem.
MOHAMMED BELLO ADOKE, SAN, CFR
23 KOLDA STREET,