COVER
Malami Admits Nigeria Can’t Win OPL 245 Court Cases
The Federal Government may be considering of dropping the court cases related to OPL 245 because of the slim prospect of judicial victory.
In a memo to President Muhammadu Buhari, Minister of Justice and Attorney General of the Federation (AGF), Abubakar Malami, advised that the termination of the cases will allow the country enjoy the economic benefits of the controversial oil block while fossil fuels are still in vogue.
Malami said the dispute and associated litigation has brought negative economic consequences for Nigeria “particularly in terms of foreign exchange earnings, loss of Tax income and Royalty payments”.
OPL 245 is believed to be Nigeria’s most endowed oil block but its development has been stalled since Buhari came to power in 2015.
His administration has been pursuing a series of litigation home and abroad against Royal Dutch Shell, Eni/Nigeria Agip Exploration (NAE), Shell Nigeria Ultra Deep (SNUD) Ltd, and Shell Nigeria Exploration Company (SNEPCO) — as well as Mohammed Bello Adoke, former AGF, over allegations of fraud and corruption in the OPL 245 deal. They all deny the charges.
In 2011, Shell and ENI paid $1.1 billion to acquire 100 percent stake in OPL 245 after Malabu, the original allottee, relinquished its interest in the acreage — but foreign anti-corruption campaigners alleged that the transaction was shrouded in corruption.
The federal government pursued both criminal and civil cases and has lost in foreign jurisdictions but the prosecution has continued in Nigeria using the same evidence that failed abroad.
The cases in Nigeria are being prosecuted by the Economic and Financial Crimes Commission (EFCC).
In his memo dated 6 February 2023, and obtained by TheCable, the AGF reminded Buhari of the string of losses Nigeria has suffered over the years in trying to prove corruption and fraud in the transaction.
“Your Excellency, recent developments, particularly the series of losses recorded in cases that arose from the facts of OPL 245 2011 Resolution Agreements in different jurisdictions, should be concerning. These losses include:
“Judgment of the UK Courts delivered on 22 May 2020 declining jurisdiction in a case filed by FGN against Shell/SNUD and ENI asking for compensation in the sum of $1.1 billion in relation to their conduct in the OPL 245 2011 Resolution Agreements;
“Judgment of the Italian Constitutional Court dated 17th March 2021, in the Prosecution of NAE in Milan, Italy for international corruption allegedly connected with OPL 245 2011 Resolution Agreements which was concluded in favour of ENI;
“Judgment delivered by the UK Court in June 2022, the FGN lost its $1.7 billion claim against JP Morgan Bank over transfers of proceeds from the sale of OPL 245 pursuant to the OPL 245 2011 Resolution Agreements.
“The US Department of Justice previously investigated the OPL 245 2011 transaction and announced in October 2019 that it was closing the case.
“In April 2020, the US Securities and Exchange Commission also closed investigation into the controversial OPL 245 deal after it could not prove fraud or corruption.”
Malami noted that upon the conclusion of the case in Milan in March 2021, Buhari — with advice from the Nigerian Upstream Petroleum Resources Commission (NUPRC) and the office of the AGF — granted consent to convert the oil prospecting licence (OPL) to an oil mining lease (OML) for NAE to commence production.
He recalled that Timi Sylva, then-minister of state for petroleum resources, wrote to ENI in May 2022 to convey Nigeria’s readiness to resolve all the issues but the assurance “remains ineffectual as long as Charge CR: 151/2020 against ENI in Nigeria being prosecuted by EFCC remains in Court,” Malami wrote.
In his assessment of the current situation, Malami wrote: “In sum, Mr. President is invited to note that: “(a) OPL 245 is the most priced Oil block in the country.
“FGN has gained certain benefits from SNUD/NAE/ENI in respect of OPL 245. In particular, SNUD/NAE/ENI have made payments to FGN and also expended resources thereon including:
“Cumulative total of $210 million Signature Bonus. Approximately $500 million committed by SNUD into the development and de-risking of OPL 245. Payment of $1,092,040,000.00 to Malabu as consideration for the OPL 245 2011 Resolution Agreements. Litigation cost of prosecuting the several Suits connected with the subject matter in various jurisdictions.
“By allowing SNUD alter its position in the sums stated in (b) (I) to (IV) above, and without getting a corresponding value for same over time through FGN’s Policy summersault, litigation and disputes, Nigeria could reasonably be portrayed as an unfriendly investment destination whose credibility is suspect.
“FGN’s actions which denied SNUD/ENI/NAE the opportunity to exploit OPL 245 led to ENI’s International Arbitral Proceedings against FGN claiming $1.3 billion plus interest and arbitration costs. (No: Case No. ARB/20/41/).
“The controversies and litigations, particularly the pending charge No CR/ 151/2020 filed by the EFCC against NAE/ENI and others has placed encumbrance on the ability of FGN to enjoy the financial benefits associated with the exploration OPL 245 with attendant economic losses to the Nation.
“Judicial determinations in Milan & UK, and administrative decisions in the USA, all favourable to ENI/NAE, together with the Consent Judgment earlier entered to which FGN was a Party makes it a more beneficial approach for FGN to consider settlement of charge No: CR/151/2020 as the best option in the circumstances.
“Whilst the dispute and associated litigation cum Arbitration lasted, neither SNUD/NAE nor even FGN would exploit OPL 245 with negative economic consequences for FGN and the people of Nigeria particularly in terms of foreign exchange earnings, loss of Tax income and Royalty payments.
“A careful review and evaluation of the Charge No CR: 151/2020 pending at the FCT High Court, particularly the three counts against ENI/NAE, SNUD & SNEPCO leads to an almost inevitable conclusion that the Charge does not disclose sufficient evidence to excite any prospect of success in the case.
“It is in the best interest of the Federal Government and Peoples of Nigeria, to resolve all issues connected with OPL 245, especially the commercial issues, by discontinuing the pending charge No CR/151/020, and to expedite the process of converting the OPL to an OML for ENI/SNEPCO thereby taking advantage of the fast-disappearing opportunities in the oil exploration industry, and attracting other high-net worth investors that will provide the resources much needed in the Oil industry and by extension our economy at this time.
“(j) The above conclusion is consistent with my earlier letter dated 27th September 2017 ref: DPPA/FMPR/198/ 17, which position was supported and re-established by Dr. Emmanuel Ibe Kachikwu and Chief Timipre Sylva in their letters dated 13th December 2017 ref: MPR/STAHMS/S.26/18, and 27th May 2022 respectively.”
The AGF asked the president to allow the cases to be terminated for progress to be made.
“In view of the foregoing, and if deemed appropriate, Mr. President may wish to:
“Direct the discontinuation of counts 2, 3, & 13 in Charge No CR: 151/2020 pending at the FCT High Court particularly the counts against ENI/NAE, SNUD & SNEPCO.
“Direct the total discontinuation of all investigations by all Law Enforcement Agencies, particularly, EFCC, involving ENI/NAE, SNUD & SNEPCO in relation to OPL 245.
“Direct the NUPRC and any other relevant Agencies to expedite the conversion of OPL 245 to an OML in furtherance of the Ministerial Consent granted via the letter dated 16th May 2022 ref PRES/88/MPR/90.
“Approve the settlement of all Civil cases between FGN and ENI/NAE, SNUD & SNEPCO in relation to OPL 245.
“Approve that the Attorney-General of the Federation and Minister of Justice exercise his powers under Section 174(1)(c) of the 1999 Constitution of the Federal Republic of Nigeria (as amended) to discontinue the case against NAE/ENI, SNUD & SNEPCO PROVIDED NAE/ENI, SNUD & SNEPCO equally agree to discontinue the Arbitration Proceedings against FGN on the grounds that FGN’s delay in converting the OPL 245 to an OML is a breach of Nigeria’s obligations under the relevant Treaties, and to hold FGN harmless in respect of all claims concerning OPL 245,” he wrote.
TheCable understands that while Buhari may be disposed to resolving the issues before leaving office, the fate of Mohammed Abacha remains an issue.
As previously reported by TheCable, the final resolution depends on a proposal by the EFCC for a compensation to Abacha by ENI.
Abacha is laying claim to the ownership of Malabu Oil & Gas Ltd, the company awarded OPL 245 in 1998 by Sani Abacha, his father and then-military head of state.
He alleged that the ownership documents of the company were illegally altered, thereby denying him benefits from the $1.1 billion paid by Shell and ENI to acquire Malabu’s interest in the oil block.
The EFCC objected to the proposal to convert the OPL to OML and for the court case to be discontinued, saying it “did not consider the interest of the actual shareholders of the Malabu Oil and Gas Limited (Mohammed Sani Abacha and Pecos Energy Limited) culminating in the various litigations regarding OPL 245. This action has globally undermined the image of the Federal Republic of Nigeria”.
TheCable learnt that EFCC is proposing that ENI should set aside $500 million from the proceeds of production to compensate Abacha.
In a case filed in court by the EFCC against Malabu, Shell, Eni, Adoke, Aliyu Abubakar, Etete, and Rasky Gbinigie (Malabu’s company secretary), the anti-graft is alleging that they colluded to remove Abacha’s name as a director of Malabu.
According to reports, a man named “Mohammed Sani” originally had 50 percent in the company, with “Kweku Amafegha”, believed to be a pseudonym for Etete, owning 30 percent; and Wabi Hassan, the wife of Hassan Adamu, Nigeria’s then-ambassador to the US, was credited with owning 20 percent.
Mohammed Abacha, who is EFCC’s key witness, told the court that he was the “Mohammed Sani” but admitted that he did not pay for the shares either in cash or by any other means.
Court Declares Ararume’s Sack as NNPCL Chairman Illegal
The Federal High Court, Abuja has declared the sack of Sen. Ifeanyi Ararume by the Federal Government as Non-Executive Chairman of the Nigeria National Petroleum Company Limited (NNPCL) as illegal and unlawful.
Delivering judgment in the matter yesterday, Justice Inyang Ekwo, said that his removal was unconstitutional and as such the court restored him as the Non- Executive Chairman of the company with full benefits.
The judge also awarded N5 billion against the federal government and NNPCL in favour of Ararume as damages for what he suffered on account of the wrongful sack and disruption of his appointment.
Justice Ekwo ordered that Ararume be immediately restored to office as non Executive Chairman of the NNPCL.
The court also declared as null and void and set aside all decisions that were taken by the Board of Directors of the NNPCL after Ararume’s sack.
The court said that the government acted ultra vires, wrongful, illegal, null and void in the way and manner Ararume was sacked after using his name to register the company.
Justice Ekwo in the judgment agreed that under Section 63 of the Company and Allied Matters Act, (CAMA), the president was vested with powers to remove directors of the organization but held that the powers were not at large.
The judge said that the law clearly stipulated conditions under which directors of the NNPCL could be sacked, adding that a breach of the stipulated conditions would automatically make any purported sack unlawful.
In the instant case, the judge said that the federal government’s letter of Jan. 17, 2022 signed by Secretary to the Government of the Federation (SGF), did not give any reason why Ararume was removed.
The court said that the issue of contract fraud raised in the processes filed by the NNPCL casting doubts on the character, integrity and reputation of Ararume was an afterthought as such facts were not adduced in the letter that removed him.
Justice Ekwo said it was bad enough that the NNPCL claimed to have obtained the alleged contract fraud against Ararume from an on-line media, adding that no probate value could be attached to such information by any court.
The judge said even if the allegations were to be made in the proper way, the plaintiff would have been confronted with same and be allowed to defend himself as required by law.
He added that anything short of that amounted to denial of fair hearing which he said was against natural justice.
The judge restrained the government from removing Ararume as a director of the NNPCL and that his name must also not be removed as Non- Executive Chairman of the organisation.
Ararume dragged the federal government to court praying it to declare his removal as NNPCL chairman illegal, unlawful and unconstitutional.
He also asked the court to declare that it was a total breach of the Company and Allied Matters Act (CAMA) under which NNPCL was incorporated.
Besides asking the court to issue an order to return him to office, Ararume demanded N100 billion as compensation for the damages he suffered nationally and internationally by the unlawful way and manner he was sacked.
The suit marked FHC/ABJ/CS/691/2022 was instituted on his behalf by a group of Senior Advocates of Nigeria (SANs) comprising Messrs Chris Uche, Ahmed Raji, Mahmud Magaji, James Onoja, K.C Nwufor and Gordy Uche.
Ararume had prayed for an order of the court setting aside his removal vide a letter of Jan. 17, 2022 with reference number SGF.3V111/86.
He also sought an order of court reinstating him and restoring him to office with all the appurtenant rights and privileges of the office of the NNPC non Executive Chairman.
He further demanded for the nullification and setting aside of all decisions and resolutions of the NNPC Board made in his absence from Jan. 17, 2022 till date and another order restraining the defendants from removing his name as director of the company.
Earlier, the judge refused to acknowledge the presence of Mr Ibrahim Shafi who announced his appearance on behalf of NNPCL.
“I will not record your appearance because you walked out of the court.
“I will only record your appearance by leave of court because the court is not a market place where you walk out and return at will,” the judge said.
By Mike Odiakose, Abuja
Immediate past governor of Kogi State, Yahaya Bello will spend the 2024 Christmas and 2025 New Year days in Kuje prison, Abuja, following refusal of his bail application by the Federal Capital Territory High Court.
Justice Maryann Anenih yesterday adjourned the case until Jan.
29, Feb. 25, and Feb. 27, 2025 for the continuation of the hearing.The former governor is standing trial, along with two others, in an N110 billion money laundering charge brought against him by the Economic and Financial Crimes Commission (EFCC).
Justice Anenih had refused to grant a bail application filed by Bello, saying it was filed prematurely.
The judge admitted Umar Oricha and Abdulsalam Hudu, to bail in the sum of N 300 million each with two sureties.
Justice Anenih, while delivering a ruling said, having been filed when Bello was neither in custody nor before the court, the instant application was incompetent.
“Consequently, the instant application having been filed prematurely is hereby refused,” she said.
Recalling the arguments before the court on the bail application, the judge had said, “before the court is a motion on notice, dated and filed on Nov. 22.
“The 1st Defendant seeks an order of this honourable court admitting him to bail pending the hearing and determination of the charge.
“That he became aware of the instant charge through the public summons. That he is a two-term governor of Kogi State. That if released on bail, he would not interfere with the witnesses and not jump bail.”
She said the Defendant’s Counsel, JB Daudu, SAN, had told the court that he had submitted sufficient facts to grant the bail.
He urged the court to exercise its discretion judicially and judiciously to grant the bail.
Opposing the bail application, the Prosecution Counsel, Kemi Pinheiro, SAN, argued that the instant application was grossly incompetent, having been filed before arraignment.
He said it ought to be filed after arraignment but the 1st Defendant’s Counsel disagreed, saying there was no authority
“That says that an application can only be filed when it is ripe for hearing.”
Justice Anenih held that the instant application for bail showed that it was filed several days after the 1st defendant was taken into custody.”
Citing the ACJA, the judge said the provision provided that an application for bail could be made when a defendant had been arrested, detained, arraigned or brought before the court.
Bello had filed an application for his bail on November 22 but was taken into custody on November 26 and arraigned on Nov. 27.
From Jude Dangwam, Jos
Conference of Autochthonous Ethnic Nationalities Community Development Association (CONAECDA) has called on the federal government to intensify efforts in the resettlement of displaced persons in their ancestral homes.
The organization made this call at the end of its conference held in Jos, the Plateau State Capital weekend.
Thirty resolutions were passed covering security, economy, politics, governance, culture, languages, human rights and indigenous peoples’ rights among others.
The Conference President, Samuel Achie and Secretary Suleman Sukukum in a communique noted that the conference received and discussed reports from communities based on which resolutions were reached on securing, reconstruction, rehabilitation and returning communities displaced by violence across the Middle Belt.
“After considering the reports from communities displaced by violent conflicts, conference resolved, and called on government to focus on providing security to deter further displacements.
“Call on government to provide security to enable communities to return. Government and donor partners should assist in reconstructing and returning displaced communities,” the communique stated.
The GOC 3 Armoured Division Nigeria Army represented by Lt Col Abdullahi Mohammed said the Nigerian Army is committed to working closely with communities to achieve a crime-free society, urging communities to support them with credible information.
“Security is a collective effort, and we cannot do it alone, the community plays a crucial role in ensuring safety.
“We urge everyone here not to shield or protect individuals involved in criminal activities. Transparency and collaboration, together, with maximum cooperation, we can achieve peace, security, and prosperity for our society,” the GOC stated.
The National Coordinator of CONECDA, Dr. Zuwaghu Bonat in his address at the gathering noted that the theme of this year’s program, Returning, Resettling, and Rehabilitating Displaced Communities, was chosen as a wakeup call on the federal government.
He maintained that the organization is aware that President Bola Tinubu has expressed a commitment to ensuring that displaced communities return to their ancestral lands.
He said similarly, some state governments, including Plateau State, have set up committees to address the lingering matter.
The coordinator however cautioned, “It is critical that we avoid generalizations or profiling. For instance, Not all Muslims are involved in terrorism. The overwhelming majority of Muslims in Nigeria are peaceful and reject extremist ideologies.
“We also know that some terrorists exploit religion to mobilize support or rationalize their actions. However, their atrocities – slaughtering women, cutting open pregnant mothers, and killing children show a profound disregard for humanity and God. Normal human beings would not commit such acts.
“We must also be cautious about lumping banditry with terrorism. While statistics indicate that many bandits and kidnappers may share similar ethnic backgrounds, kidnapping has now evolved into a profit-driven enterprise. This distinction is vital to address the root causes effectively,” he stated.
The Governor of Plateau State, Caleb Mutfwang represented by his Senior Special Assistant (SSA) on Middle Belt Nationalities, Hon Daniel Kwada noted that the conference was apt to addressed the various underlying issues bedeviling the region and its people.
“We in the Middle Belt have long been standing at the crossroads of Nigeria’s complex history. Despite our tireless efforts to stabilize this nation, we have faced immense challenges, including underdevelopment, security issues, and marginalization.
“Often, we are unfairly maligned, but gatherings like this offer a chance to change the narrative.
“Such conferences set the tone for better discussions. They allow us to drive processes that bring development, ensure security, and elevate our people to greater heights,” Mutfwang noted.
Securities and Exchange Commission (SEC) has called on banks to reinforce their corporate governance principles and risk management frameworks to boost investor confidence during the ongoing recapitalisation exercise.
Dr Emomotimi Agama, Director-General, SEC, said this at the yearly workshop of the Capital Market Correspondents Association of Nigeria (CAMCAN) held in Lagos.
The theme of the workshop is: “Recapitalisation: Bridging the Gap between Investors and Issuers in the Nigerian Capital Market”.
Agama, represented by the Divisional Head of Legal and Enforcement at the SEC, Mr John Achile, stated that the 2024–2026 banking sector recapitalisation framework offers clear guidance for issuers while prioritising the protection of investors’ interests
He restated the commission’s commitment towards ensuring transparency and efficiency in the recapitalisation process.
The director-general stated that the key to bridging the gap between issuers and investors remained the harnessing of innovation for inclusive growth.
In view of this, Agama said, “SEC, through the aid of digital platform, is exploring the integration of blockchain technology for secure and transparent transaction processing to redefine trust in the market.”
He added that the oversubscription of most recapitalisation offers in 2024 reflects strong investor confidence.
To sustain this momentum, the director-general said that SEC had intensified efforts to enhance disclosure standards and corporate governance practices.
According to him, expanding financial literacy campaigns and collaborating with fintech companies to provide low-entry investment options will democratise access to the capital market.
He assured stakeholders of the commission’s steadfastness in achieving its mission of creating an enabling environment for seamless and transparent capital formation.
“Our efforts are anchored on providing issuers with clear guidelines and maintaining open lines of communication with all market stakeholders, reducing bureaucratic bottlenecks through digitalisation.
“We also ensure timely review and approval of applications, and enhancing regulatory oversight to protect investors while promoting market integrity,” he added.
Agama listed constraints to the exercise to include: addressing market volatility, systemic risks, limited retail participation as well as combating skepticism among investors who demand greater transparency and accountability.
He said: “We are equally presented with opportunities which include leveraging technology to deepen financial inclusion and enhance market liquidity.
“It also involves developing innovative financial products, such as green bonds and sukuk, to attract diverse investor segments.
“The success of recapitalisation efforts depends on collaboration among regulators, issuers, and investors.”
Speaking on market infrastructure at the panel session, Achile said SEC provides oversight to every operations in the market, ranging from technology innovations to market.
He stated that the commission is committed to transparency and being mindful of the benefits and risks associated with technology adoption.
Achile noted that SEC does due diligence to all the innovative ideas that comes into the market to ensure adequate compliance with the requirements.
On the rising unclaimed dividend figure, Achile blamed the inability of investors to comply with regulatory requirements and information gap.
He noted that SEC had done everything within its powers to ensure that investors receive their dividend at the appropriate time.
He, however, assured that the commission would continue to strengthen its dual role of market regulation and investor protection to boost confidence in the market.
In her welcome address, the Chairman of CAMCAN, Mrs Chinyere Joel-Nwokeoma, said banks’ recapitalisation is not just a regulatory requirement, but an opportunity to rebuild trust, strengthen the capital market, and drive sustainable growth.
Joel-Nwokeoma stated that the recent recapitalisation in the banking sector had brought to the fore the need for a more robust and inclusive capital market.
She added that as banks seek to strengthen their balance sheets and improve their capital adequacy ratios, it is imperative to create an environment that fosters trust, transparency, and cooperation between investors and issuers.
The chairman called for collaboration to bridge the gap between investors and issuers to create a more inclusive and vibrant Nigerian capital market.She said: “we must work together to strengthen corporate governance and risk management practices in banks, enhance disclosure and transparency requirements for issuers.” NAN
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