The Chairman, House of Representatives Committee on Financial Crimes, Kayode Oladele, has raised the alarm that Nigeria may have lost up to $10bn in the controversial Malabu oil deal in one transaction on Operating Licence 245.
According to him, the outcome of various studies from oil industry experts projected loss to the country at $4.5bn, $6bn, $9.8bn and $10bn based on lopsided Production Sharing Contracts that excluded some key components of the license like gas.
While speaking at the anti-corruption situation room on public presentation of expert analysis of OPL 245 deal by Human and Environmental Development Agenda in partnership with Resources for Development Center, Canada; Global Witness, Re: Common and CornerHouse on Wednesday in Abuja.
Mr Oladele said investigations were reinforced by the discovery that $1.1bn was paid by SHELL and Agip for OPL 245 disguised as payment to the Federal Government.
He said this happened despite common knowledge that the only entitlement of the federal government in the award of oil bloc was a signing bonus while the beneficiary of the award (in this case Malabu) was entitled to the full value of the block ($1.1bn) if it divests its stake.
He said, “While litigation is ongoing in Milan, Italy against Shell and ENI over charges of bribery with respect to the deal, there are emerging facts to the effect that correspondences in the domains of Shell and ENI show that the multinational companies were alerted ahead by Nigerian civil servants that the transaction was deceptive and that the terms contain hiding clauses which ab-initio ought to have rendered the contract inappropriate.
“It is shocking to note, based on your expert analysis report, that information contained in the Resolution Agreements regarding OPL 245 which was signed in April 2011 and the Production Sharing Agreement (PSA) signed between ENI and Shell of 21 February 2012, projected resource output upon which the subsisting agreement was based is inconsistent with established industry-standard reserve estimation techniques.
“The new discoveries on the OPL 245, based on your evaluation analysis, further show that the fiscal terms that emerged from the Resolution Agreement of 2011 and the PSA signed between ENI and Shell in 2012 are not consistent with the essence of a normal production sharing system”.
Don Hubert, who presented the Global Witness, Re: Common and CornerHouse report put the projected loss at $4.5bn.
He emphasised that the various figures should not be the focus but the fact that Nigeria was losing a huge chunk of what supposed to accrue to her.
The HEDA’s Director, Olanrewaju Suraj, urged the federal government to revoke the licence because the country stood to lose more if it retained the deal.
Stating that the agreement was shrouded in corruption, he said, Nigeria was in an advantaged position to have its wishes granted if the revocation became a subject of litigation by the other parties.
He also noted that the cost of gas was not factored into the agreement.
“The cost of gas would be around $4bn if it were factored into the agreement by the 2011/2012 PSA made no provision that.
“So, when we add that to the initial loss of $6bn, the country would have lost $10bn when the gas component is added.”