In its latest legal moves, the Federal government has insisted Royal Dutch Shell PLC and Eni SpA resolve all corrupt cases before renewing the Oil Prospecting License (OPL) 245, one of the biggest untapped oil assets on the African continent with reserves estimated at nine billion barrels.
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According to Barnaby Pace, an international investigator with Global Witness, the license for the block, estimated to hold 482 million barrels of economically recoverable oil, expired on May 11th, 2021, ten years after Shell and Eni paid $1.3billion for the license in a scandal-plagued deal that sparked numerous criminal investigations and trials
The organisation added on Wednesday that the expiry of the licence returns control of the oil field to the Nigerian government.
Despite the expiry of the license, the field has been booked as an asset in Eni company’s accounts for 2020. However, the company acknowledges that this may need to be re-assessed “when preparing the next financial information”. Shell wrote down the value of its 50percent share in the license in 2020.
Lanre Saraju, chairman of the environmental rights group, Human and Environmental Development Agenda (HEDA) said the rule of law demands that no one should be above the law.
“Shell and Eni’s deal for this licence was deeply flawed. It would have been totally egregious to convert the license while the companies are still on trial for corruption in Nigeria and proceedings in Milan may not be concluded,” Saraju said.
President Muhammadu Buhari rejected Eni’s request that Nigeria converts the licence to a fresh oil mining license in March 2019, arguing that no further correspondence would be considered until criminal and civil court proceedings in Milan and London related to the 2011 deal had been concluded.
“Now that the license has expired, Shell and Eni should accept that they have lost the field,” Saraju said.
In March 2021, Shell, Eni, and other defendants were acquitted in Milan on charges of alleged international corruption over the deal. The case may not have concluded as a decision on whether or not the Milan Prosecutor will appeal has yet to be reached.
Eni has instituted a claim at the International Centre for Settlement of Investment Disputes, seeking compensation from Nigeria for the non-conversion of the licence while also alleging the government has breached its obligations by refusing to let the firm develop the license, which has now expired this May.
OPL 245 is perhaps the most talked-about asset in Nigeria’s oil industry. It covers 1958 square kilometers and holds over nine billion barrels of crude oil, equivalent to nearly one-quarter of Nigeria’s total proven reserves.
The deal popularly called the Malabu scandal involved the alleged transfer of about $1.1 billion by Shell and ENI through the Nigerian government to accounts controlled by a former Nigerian petroleum minister, Dan Etete.
From accounts controlled by Etete, it was alleged that about half the money ($520 million) went to accounts of companies controlled by Aliyu Abubakar, popularly known in Nigeria as the owner of AA oil.
Anti-corruption investigators and activists suspect he fronted for top officials of the Goodluck Jonathan administration as well as officials of Shell and ENI.
The transaction was authorised in 2011 by Jonathan through some of his cabinet ministers and the money was payment for OPL 245, one of Nigeria’s richest oil blocks.
The oil resources of the OPL 245 license have remained undeveloped since the controversies began.
