The Inside Story of How Nigeria Lost 2 Trillion Naira In The Malabu Oil Deals

September 11, 2020

Every Weekday, Zikoko’s Citizen will explain the biggest issues in Nigeria’s politics and policies, especially as it affects you – the Citizen.


Look, “The Lost Okoroshi” is not the only thing that is being lost nowadays. Just two days ago, Nigeria made its closing argument in an Italian Court over an oil case that has spanned 22 years and has cost us roughly 2 trillion naira in bad deals.

Below, we give a quick snapshot of the most important moments in the Malabu Oil/OPL 245 scandal. Your fave, Hushpupppi, could never. Trust me.

March 10, 1995

Sani Abacha, Nigeria’s military dictator, appoints Dan Etete as Nigeria’s Minister of Petroleum.

April 24, 1998

Daniel Etete forms and registers Malabu Oil and Gas Limited, while serving as Petroleum Minister.

The company has three shareholders:  Mohammed Sani Abacha (son of late Sani Abacha), Kweku Amagagha (one of Etete’s alias) and Hassan Hindu (wife of Hassan Lawal, a former Nigerian high commissioner to the UK).

Five days after Malabu Oil and Gas Ltd is formed, Abacha awards OPL 245 and 214 to it. OPL 245 contains 9 billion barrels of oil. Etete pays only $2 million of $20 million ‘signature’ fee.

2001

President Olusegun Obasanjo revokes Malabu’s licence, over corruption investigations. Obasanjo invites International Oil Companies (IOCs) to bid for OPL 245 licence. Shell, who was Malabu oil’s ‘technical partner’ in the previous licence grant wins OPL 245 new licence, after bidding $210m, $150m more than nearest challenger ExxonMobil. Malabu is angry that Shell has ‘acted irresponsibly’ because Shell already had ‘inside knowledge’ of the oil block while serving as their technical partners.

Malabu petitions the national assembly who conclude that the licence grant to Shell was done mala fide (in bad faith), and that the licence should be given back to Malabu Oil and Gas Ltd.

2006

OPL 245 licence reverts back to Malabu Oil after Malabu took the Government to court for failing to comply with the National Assembly’s resolutions.

Case is settled out-of-court with Edmund Daokuru, Nigeria’s Minister of state for petroleum resources confirming that Malabu now has 100% licence of OPL 245. Reports say Malabu paid a $210 million signature bonus.

2009

According to leaked emails, Etete asks Shell to make an offer of 40% stake in  OPL 245. Shell’s then Chief Executive officer, Peter Voser allegedly writes: “If at nearly 70 years old he (Etete) turns his nose at $1.2bn, he’s completely certifiable”.

6. 2009

Goodluck Jonathan’s administration confirms Malabu Oil licence holders of OPL 245. Meanwhile, Jonathan was a former tutor to Etete’s kids.

In a series of deals arranged by Diezani Allison Madueke, Shell would pay the $210m signature bonus to the government, then Shell and Eni would pay a further $1.1bn to the government, which would be then paid to Etete and other ‘middlemen’.

Meanwhile, international banks flagged the wire transfer as the government tried to pay Etete his $1.1 billion cut.

7. 2015

Buhari becomes President and EFCC begins investigation of OPL 245 licencing, which it considers “corrupt and bad value”.

8. 2020

Nigeria’s lawyers make closing argument for Nigeria in an Italian court. Says Nigeria should be paid $1.1 billion for all the money lost in the OPL 245 corrupt deals.

9. Summary

An oil block of 9 billion barrels of oil that should have fetched Nigeria over N2 Trillion Naira within the past 22 years has fetched us almost nothing, and our country is still massively underdeveloped. In short, we need to really do better, as a country.

Check back every weekday by 10am for more Zikoko Citizen stories.

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