Malabu Scandal: Nigerian govt demands $3.5 billion from Eni, Shell

The new claim is contained in a London court filing by the Nigerian government against the two oil multinationals and other parties involved in the long-running case.

The court documents, obtained by this newspaper’s London partners, Finance Uncovered, and seen by PREMIUM TIMES, shows the government also alleged that the Malabu deal was “corrupt” and not done in the interest of Nigeria.

The government accused Eni, Shell, Malabu and other defendants of, among others, “fraud or/and bribery, dishonest assistance and unlawful means of conspiracy.”

Initial documents showed that a British executive and then CEO of Arcadia Petroleum Ltd, Peter Bosworth, received money from a key figure in the scandal and former Nigerian oil minister, Dan Etete.

New filings lodged at the London court showed that the Nigerian government is claiming that the nation was deprived of the disinterested advice of its ministers and agents, who acted as parties in the deal, adding that the officials acted with sinister motives and shortchanged the nation.

At the centre of the Malabu scandal is the transfer of about $1.1 billion by oil multinationals, Shell and ENI, through the Nigerian government to accounts controlled by Mr Etete.

Investigations showed that about half the money ($520 million) went to the accounts of companies jointly controlled by Abubakar Aliyu, popularly known in Nigeria as the owner of AA oil, and Mr Etete. Anti-corruption investigators and activists suspect  Aliyu fronted for top officials of a past administration, as well of officials of Shell and ENI.

The transaction was authorised in 2011 by Mr Jonathan through some of his cabinet ministers, and the money was payment for the block, considered one of Nigeria’s most lucrative. Although Shell and ENI initially claimed they did not know the money would end up with Mr Etete and his cronies, evidence has shown that claim to be false.

After a joint investigation by Global Witness and Finance Uncovered, Shell later admitted it did know the money would go to Mr Etete. Shell, Eni, Mr Etete, Mr Aliyu and several officials of the oil firms are being prosecuted in Italy for their roles in the scandal.

According to documents seen by PREMIUM TIMES, the Nigerian government claims the block was undervalued even at the time it was sold in 2011.According to the filing, the block’s value, as at 2011 was about $3.5 billion even though it was valued at $1.3 billion. The government also claimed that it only received what it now considers to be an insufficient $209 million signature bonus in April 2011.

The government said it claims “further or alternatively, compensatory damages for the undervalue at which the OPL 245 rights were sold.”

It added that, “The amount of the undervalue will be a matter for expert evidence to be particularised in due course. The FRN estimates the value of OPL 245 in April 2011 to have been at least US$3.5bn for which it received no or negligible value (save that the FRN will give credit for any recovery pursuant to sub-paragraph 2(a) above, and the US$209m signature bonus that it received in April 2011).”

“Further and alternatively,” the Nigerian government also demands, “an account of all past and future profits (or a declaration that the FRN—Federal Republic of Nigeria—-is entitled to all future profits) made by each of Shell, Eni and/or Malabu, EVP and ILCL, out the unlawful exploitation of the OPL 245 rights, including the amount by which they benefitted from favourable terms, that they would not have received had bribes not been paid.”