Nigeria loses $6bn to Malabu oil block deal

THE last is yet to be heard of the controversial Oil Prospecting Lease (OPL 245), otherwise known as Malabu Oil Block, to Shell and Eni as a report submitted to the Economic and Financial Crimes Commission (EFCC) reveals that the operators of the block took away oil profit from the government and the Nigerian people to the tune of $6 billion.

This is even as the EFCC has vowed to prosecute those found complicit in the scandal.

The OPL 245 is said to be one of the biggest sources of untapped oil reserves on the African continent with reserves estimated at nine billion barrels.

Italian oil company, Eni, the biggest foreign oil producer in Africa, has been doing business in Nigeria since 1962, while the Anglo-Dutch company, Shell, is the biggest foreign investor in the country.

Documents containing the report were submitted to EFCC acting chairman, Ibrahim Magu, by the President, Resource for Development Consulting, Dr Don Hubert, on Thursday at the EFCC headquarters in Abuja.

A statement made available to Saturday Tribune by EFCCs acting head of media and publicity, Tony Orilade, said Hubert, an extractive industries analyst, analysed the terms and conditions for the sale of the controversial Malabu Oil Block to Shell and Eni.

The report pointed out that at least one third of the value of the oil block, which comes from fiscal concessions in the 2011 Resolution Agreement, RA, between Nigeria and Shell and Eni, essentially takes away oil profit from the Federal Government and the Nigerian people.

The statement quoted the Canada-based extractive industries analyst as saying that the result of their findings indicated an estimate minimum loss of $4.5 billion as a result of the 2011 deal.

“The 2011 RA will result in the loss of revenue to the Nigerian people and government to the tune of at least $4.5 billion.

“The reason for the losses is the core relevant of a production sharing contract, the share of profit to the government has been removed from this particular deal,” Hubert stated.

He added that “as it stands today, Nigeria will lose between $6 billion and N10 billion to the deal, which is now being investigated outside Nigeria.”

According to him, his organisation had helped countries rich in oil and gas to get a fair share of revenue, analyse oil contracts and build economic models and ultimately forecast government revenue.

On his part, the Chairman, HEDA Resource Centre, Olarewaju Suraju, a corruption hunter and one of the partners in the team that produced the findings on the OPL 245, commended the efforts of the EFCC in the fight against corruption.

According to the statement, Suraju, who said they prepared the damning finding to enable the Nigerian government identify and punish the individuals and organizations involved in the oil scam, stated that all hands had to be on deck to stop further pillage of the country’s oil revenue.

“It is the strong recommendation of HEDA and the partners that the OPL 245 license should be revoked and we now have both economic and legal basis to challenge the deal,” he was quoted as saying.

Meanwhile, the acting EFCC chairman, Ibrahim Magu, has given the assurance that the anti-corruption commission is revving up its investigations into the Malabu Oil scandal, declaring that those found complicit will be prosecuted.

Magu stated that a committee would be constituted by the commission to study the report in order for EFCC to extend its investigation to all grey areas.

He promised that the commission would ensure that the report was thoroughly dealt with.

“We shall constitute a committee to digest it so that investigation can be extended to all grey areas and charges brought or amended against the suspects accordingly,” he said.

Magu added that the EFCC was taking its time to investigate the scandal, so that “a water tight case” would be made before prosecution.

Saturday Tribune recalls that both Shell and Eni are embroiled in a long-running corruption case revolving around the 2011 purchase of the OPL 245 – for about $1.3 billion.

Though officials of the companies have consistently denied any wrongdoing top executives of the two companies are facing trial in an Italian court in Milan, Italy, over alleged corruption in the controversial Malabu scandal.

Eni Chief Executive Officer (CEO), Claudio Descalzi and four ex-Shell managers, including former Shell Foundation Chairman, Malcolm Brinded, are facing charges in the Milan court over the scandal.