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Reps order cancellation of $1.1 billion Malabu oil deal

19 February 2014, 10:39

Abuja -The House of Representatives’ Ad- hoc Committee on Malabu Oil and Gas  Limited has recommended that Shell Nigeria Ultra Deeps(SNUD) be censured by the House for  lack of transparency in its bid to acquire OPL245.

The Committee made the recommendations in its report to the House on the transaction involving the federal government and Shell/Agip companies and Malabu Oil and Gas Limited.

It also recommended that SNUD be reprimanded for its lack of disclosure in its bid to acquire oil block OPL 245.

The Chairman of the Ad - hoc Committee, Leo Ogor,  said that the modalities which Shell Nigeria entered into the oil block transaction lacked transparency.

 He urged the House to look at the report with the interest of the nation at heart.

The Committee equally recommended that AGIP Nigeria Agip Exploration limited (NAE) be formally censured or reprimanded by the House for its role in the “Resolution Agreement" which lacked transparency.

It also recommended that the Federal Government should cancel OPL245 licence recently  granted to Shell Nigeria Exploration and Production Company (SNEPCO) because of its flawed 'resolution agreement..

It said that the 'resolution agreement’ was contrary to the laws of Nigeria.

The committee said that Shell entered into a resolution agreement with Malabu Oil and Gas, SNEPCO and NAE with the Federal Government acting as an Obligor.

The Committee said that the 'resolution agreement' ceded away “our national interest and further committed Nigeria to some unacceptable indemnities and liabilities while acting as an Obligor”.

It also recommended that in redrafting a new ‘resolution agreement’, Nigeria's tax laws should be respected where applicable.

It further recommended that the Federal government, through the Ministry of Petroleum Resources and Office of the Attorney-General of the Federation, facilitates a new ' resolution agreement’.

It said the agreement should be in line with the Petroleum Act and the Indigenous Concession Programme (ICP) of government that guided the initial allocation of OPL 245 to Malabu.

It also recommended that the House should direct the committees on Petroleum Resources (Upstream) and Downstream, Gas Resources and Local Content to make a list of similar ventures with petroleum sharing agreement.

It would be recalled that Malabu was allocated OPL 245 in April, 1998 and in accordance with the terms of the grant; it appointed Shell as its technical partner.

The two companies executed relevant agreements, including a Joint Operation Agreement in 2001.

Shell took 40 per cent participating interests in the venture in a farm-in- agreement and also signed an agreement with Malabu as its technical partner for the venture.

The licence was subsequently revoked by the Federal Government on July 2, 2001.

However, Malabu petitioned the House of Representatives Committee on Petroleum urging it to look into the matter.

The House then set up an Ad-hoc Committee to investigate the transaction in 2013.

-    NAN

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