Shell Nigeria Ultra Deep Limited (SNUD) is in the centre of the Malabu Oil deal, for which it is being investigated by the British police.
The Nation has obtained documents filed at the International Centre for Settlement of Investment Disputes in wh
The controversy over the $1.092, 040,000 Malabu Oil deal continues with one of the parties, Shell Nigeria Ultra Deep Limited (SNUD) opening up on how it acquired 40 per percent equity in Oil Prospecting Licence (OPL) 245 in 2000.
The company insisted that it followed due process and consulted with relevant officials in the administration of ex-President Olusegun Obasanjo.
It also claimed that it received verbal assurances from the then Vice-President Atiku Abubakar that there was no objection from the Federal Government to Shell acquiring an interest in OPL 245.
It attributed the current crisis to the withdrawal of the allocation of OPL 245 to Malabu in July 2001 and how Obasanjo allegedly made a u-turn on March 25, 2002 leading to threats of legal action from Malabu Oil and Gas.
Shell admitted that the revocation of the oil block was shocking as “no explanation was given”. The Anglo-Dutch firm said it paid $210million as signature bonus for the oil block and operates the block on a Production Sharing Contract (PSC) basis.
It said S$ 209 million of the $210million signature bonus had remained in an escrow account ever since and with accruing interest; it grew to S$231, 299, 884.04 as of February 2008.
These facts were contained in a Claimant’s Memorial filed by SNUD before the International Centre for Settlement of Investment Disputes.
A copy of the Memorial was exclusively obtained yesterday by our correspondent.
The memorial is expected to be tabled before the UK Police which has stepped into the investigation of the Malabu Oil deal.
The memorial said: “In 1998, during the Gen. Sani Abacha military regime, OPL 245 had been allocated to Malabu on behalf of the Ministry of Petroleum Resources by Mr. Dan Etete in his capacity as the then Presidential Adviser on Petroleum and Energy. Malabu was an indigenous Nigerian company, incorporated on 24 April 1999, with Nigerian shareholders, apparently for the purpose of petroleum prospecting.
“In March 2000, Malabu approached Shell within a farm-in proposal. Malabu was looking for an international oil company to take a 40% equity stake in the OPL 245 licence itself and ‘carry’ Malabu in developing the block i.e. the international oil company would take all the exploration and development risk by funding Malabu’s share of the costs (including the acquisition, exploration and development costs of the block) as well as its own.
“Those costs would then be recovered by the international oil company from Malabu’s share oil production.
“Malabu’s representative provided Shell with a technical information brochure relating to OPL 245 and copies of the letter of allocation of OPL 245 to Malabu dated 29 April 1998, a letter to the DPR attaching cheques in respect of the US$2m “down payment” of the signature bonus and other fees and a letter confirming that the allocation had not been withdrawn dated 9 March 2000.
“At that time, several other oil exploration and development licences allocated by the Abacha regime had been withdrawn by the new civilian Government of President Obasanjo.
“Shell made enquiries from the Assistant Director of the DPR, Mr. Andrew Obaje, on 31 March, 2000. He confirmed to Shell that OPL 245 had been owned by Malabu since April 1998 and was currently in good standing.
“Obaje told Shell that the FGN did not intend to revoke the allocation because Malabu had paid all the required fees and part (US$2.04 million) of the US$20 million signature bonus for the block. The map of allocated concessions obtained from the DPR also indicated that Malabu was the owner of OPL 245.
