Abubakar Malami, the attorney-general of the federation (AGF) and minister of justice, has reportedly opted to have court cases related to OPL 245 terminated by the federal government because the prospects of a judicial victory are slim.

In a memo to President Muhammadu Buhari, 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, TheCable reported

He 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, 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.

Malami wrote: “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:

“I. 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;

“II. 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;

“III. 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.

“IV. The US Department of Justice previously investigated the OPL 245 2011 transaction and announced in October 2019 that it was closing the case.

“V. 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”.

‘UNFRIENDLY INVESTMENT DESTINATION’

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.

“(b) 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:

“I. Cumulative total of $210 million Signature Bonus.

“II. Approximately $500 million committed by SNUD into the development and de-risking of OPL 245.

“III. Payment of $1,092,040,000.00 to Malabu as consideration for the OPL 245 2011 Resolution Agreements.

“IV. Litigation cost of prosecuting the several Suits connected with the subject matter in various jurisdictions.

“(c) 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.

“(d) 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/).

“(e) 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.

“(f) 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.

“(g) 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.

“(h) 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.

“(i) 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.”

PRAYERS TO BUHARI

The AGF, according to TheCable, asked the president to allow the cases to be terminated for progress to be made.

He wrote: “In view of the foregoing, and if deemed appropriate, Mr. President may wish to:

“a) 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.

“b) Direct the total discontinuation of all investigations by all Law Enforcement Agencies, particularly, EFCC, involving ENI/NAE, SNUD & SNEPCO in relation to OPL 245.

“c) 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.

“d) Approve the settlement of all Civil cases between FGN and ENI/NAE, SNUD & SNEPCO in relation to OPL 245.

“e) 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.”

THE MOHAMMED ABACHA CASE

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