‘Transfer of OPL 245 to Malabu received presidential approval’

Former President Olusegun Obasanjo approved the out-of-court settlement between the Federal Government and the Malabu Oil and Gas Limited over the Oil Prospecting License (OPL) 245 dispute in 2006, a document sighted by The Guardian has revealed.

The approval formed basis of the transfer of OPL 245 from Malabu to Shell and Eni in 2011 for $1.1 billion.
Obasanjo had revoked the oil block and awarded it to Shell in July 2001 but agreed to return it to Malabu in 2006, following six years of litigation.

In the final resolution agreement approved by Obasanjo, the Federal Government asked Malabu to pay a signature bonus of $210 million.

It was not until 2011 that the Federal Government implemented the out-of-court settlement and Malabu subsequently relinquished interest in OPL 245.

Subsequently, international oil companies acquired the block in a deal that has led to a criminal trial over alleged corruption by the Italian government.

But all the defendants were discharged and acquitted by the Court of Milan in March 2021 after nearly three years of trial.

Nigeria is now seeking the award of $1.7 billion against JP Morgan Chase Bank for allegedly failing in its Quincecare duty when it transferred $810 million to Malabu from the OPL 245 sale proceeds.

The government argued that the bank ought to have known that it was “a corrupt and fraudulent scheme” and should have withheld the payment.

Government lawyers are specifically accusing Mohammed Bello Adoke, the attorney general between 2010 and 2015, of corruption. But he has always denied the allegations.

However, in their final submissions before the Business and Property Courts of England and Wales Commercial Court, last week, the lawyers said Obasanjo granted a media interview denying knowledge of the 2006 out-of-court settlement deal.

They submitted: “JP Morgan argues that it is a ‘fair inference’ that the 2006 settlement must have been considered and approved by the then President, Obasanjo, who is not accused in these proceedings of any wrongdoing.

However, Obasanjo himself had emphatically denied this. In an interview with an online newspaper in 2017, Obasanjo said he knew nothing about this deal and was not part of it. And would not have done so because he ‘could not have approved a deal with Dan Etete. What Etete did is the height of corruption. He appropriated the asset to himself illegally, illegitimately and immorally.”

But the documents sighted by The Guardian showed that there were indeed agreements between Malabu and the government of Obasanjo.

In a letter addressed to Malabu and Etete dated December 2, 2006, Edmund Daukoru, Obasanjo’s Minister of State for Petroleum Resources, conveyed presidential approval of the settlement.

Before the out-of-court settlement, a document dated November 3, 2006, revealed that Daukoru brokered a similar settlement agreement with Malabu on behalf of the Federal Government.

Also, in another letter dated October 3, 2006 and addressed to Obasanjo by Daukoru, he sought the president’s approval for the proposal for out-of-court settlement.

The letter received approval the same day with presidential initials “O.O”, standing for Olusegun Obasanjo inscribed below the approval.