The House of Representatives has called for the outright cancellation of the award of OPL 245 to Shell Nigeria Exploration and Production Company Ltd (SNEPCO) (50 per cent) and Agip (50 per cent) for identified flaws in the resolution agreement among Malabu Oil and Gas, SNEPCO and Nigeria Agip Exploration Ltd (NAE) with the federal government acting as obligor. OPL 245 is currently considered the biggest and richest oil well in the country, with proceeds capable of servicing the country's debt for the next 30 years.
This is just as the legislators directed the Economic and Financial Crimes Commission (EFCC) to prosecute all individuals and financial institutions linked with and found culpable of receiving and transferring unlawfully with respect to the OPL 245 deal.
This was contained in the report of the adhoc committee that investigated OPL 245 Malabu deal led by Hon. Leo Ogor.
The report, whose consideration was spiced with opposition to its recommendations by some members, also stated that Agip (NAE) be formally censored or reprimanded by the House for its role in the resolution agreement which lacked transparency and did not meet international best business practices.
"The resolution agreement was meant to resolve existing disputes between the various parties, which even by AGIP's acknowledgement they are not party to the disputes; in the process, they cornered 50 per cent equity in block 245," the resolution read.
The lawmakers lamented that the deal should be cancelled based on the fact that the resolution agreement "ceded away our national interest and further committed Nigeria to some unacceptable indemnities and liabilities while acting as an obligor". Clause 17 of the resolution agreement commits the federal government of Nigeria to idemnify and even defend SNUD, SNEPCO and NAE from and against "all suits, proceedings, claims, demands, losses and liability of any nature or kind, including but not limited to all litigation costs, attorney fees, settlement payments, damages and all other related costs and expenses based on, arising out of or in connection with 'resolution agreement' or the issuance of the oil prospecting licence in respect of Block 245".
The representatives also recommended that the federal government through the Ministry of Petroleum Resources and the Office of the Attorney-General of the Federation facilitate a new agreement in line with the Petroleum Act and the indigenous concession programme (ICP) of government that guided the initial allocation of OPL 245 to Malabu Oil and Gas, "as a situation where the resolution agreement diverted 100 per cent of the beneficial ownership to two foreign-based companies is contrary to our national aspirations".
The House also directed its committees on Petroleum, Gas Resources and Local Content to liaise with the Ministry of Petroleum Resources to make available a comprehensive list of similar ventures with petroleum-sharing or contract without the Nigerian National Petroleum Corporation's (NNPC) participation for necessary remediation.
They also listed Mohammed Sani Abacha or successors in title (50 per cent), Kweku Amafegha (Dan Etete) or his successor in title (30 per cent) and Pecos Energy Ltd (20 per cent), while asking the AGF, Ministry of Finance and petroleum ministry to refer in future dealings.
Going further, the report directed the Nigeria Police Force to take over the ongoing investigation of the matter of forgery and alteration of documents indicting some directors of Malabu Oil and Gas Ltd who resigned their positions or transferred their appointment or shares without authorisation and initiate prosecution of any indicted person.
LEADERSHIP had exclusively published the report of the committee on July 15, 2013, disclosing that the lawmakers had called for the outright cancellation of the deal.
The exclusive report also stated that, in its findings, the lawmakers said "the issue of OPL 245 borders on a dispute of ownership among Malabu Oil and Gas Ltd, SNUD (Shell Nigeria Ultra Deep) and the Federal Republic of Nigeria, which by extension is the NNPC. No other parties are known to be part of the said dispute. We therefore conclude that the resolution agreement, if any, should be between (sic) these three parties".
Describing it as "very worrisome", the company was quoted in a letter to the committee as saying, "in response to your letter dated 31st July, 2012, we wish to state that Nigerian Agip Exploration Limited did not enter into the transaction reflected in the Block 245 Resolution Agreement (FGN Resolution Agreement) on the basis of any invitation letter from person/persons authority/ body inviting Nigerian Agip Exploration Limited to come and resolve the dispute between the federal government of Nigeria, Malabu and Shell Nigeria Exploration and Petroleum Company Limited or to participate in the transaction".
The lawmakers also found that in violation of the Petroleum Act, the dispute resolution agreement showed that the actual signature bonus payment for the block by SNUD was one million (1,000,000) USD and not the two hundred and ten million USD (210,000,000) as stated in the bid because only that amount was paid to the federal government while the remaining one hundred and ten million dollars (110,000,000) USD was kept in an escrow account controlled by SNUD.
SNUD, the report continued, then reallocated its interest in the block to SNEPCO which reimbursed it with five hundred and forty-three million, five hundred and sixty thousand USD for work plan programme and signature bonus, leaving only the Federal Government of Nigeria as the only interest.
Querying the whereabouts of the NNPC's share in the initial 2003 PSC (Product Sharing Agreement) and the breach of Indigenous Participation Policy of the government , the lawmakers asked the federal government to unravel how full ownership at 50 per cent interest each to SNUD and NEA was approved, leaving out NNPC from the deal.