Etete: Government Did Not Invest a Dime in Malabu Oil

Tobi Soniyi in Abuja

A former Minister for Petroleum Resources, Chief Dan Etete, has disclosed that the federal government did not invest a dime in Malabu Oil and Gas Limited, and is therefore not entitled to share from the proceeds which accrued to the company from settlement of the company’s disputes.

Etete, in a response he issued to correct many of the misconceptions surrounding the out-of-court settlement of the dispute in which the company is enmeshed,  said those claiming that proceeds from the settlement should go to government were merely being gullible.

Etete alleged that some powerful people were using the presidency to turn an otherwise legitimate business transaction into criminality.

He also explained that the fact that the money was paid into an escrow account did not mean that it belonged to the federal government.

The former minister stated that the media had been fed with outright lies and had not bothered to carry out independent investigations to unearth the truth.

Etete insisted that Malabu Oil did not do any wrong but claimed what was legitimately granted to it by the federal government after complying with all the requirements.

He said the company was not granted any concession or favour but was complied with all extant laws just like other companies that were granted OPL at the same time. He noted that yet, those companies had not been accused of corruption.

Etete also said he came into Malabu as a consultant and invested all his life savings into the company to make sure the company succeeded.

He said: “I have read with great incredulity, accounts by several publications on how the settlement payments were made into federal government’s “Escrow Account” and was subsequently, “illegally” transferred to Malabu. Firstly, anyone with more than a passing understanding of the financial world knows that an Escrow Account and the funds therein cannot ab-initio be owned or appropriated by any one individual or group. It is a notional connotation, governed by instructions given to one who is appointed escrow agent over such funds and bound strictly by said instructions to disburse the funds upon fulfillment of certain recitals enshrined in the escrow agreement.

“Such funds cannot be disbursed by any other means except upon expiry of the agreement at which point the funds revert to the source of origin as enshrined in said agreement or as otherwise stated by same.  How the funds paid into an escrow account suddenly become the property of a party that were themselves a signatory to the escrow agreement baffles me? For the avoidance of doubt, the federal government received its share of $210million as signature bonus as per instructions that flowed from the escrow agreement and by the escrow agent.

“Others even more gullible said the funds were paid into the Federation Account and should have been appropriated by the National 
Assembly for spending! Nothing can be further from the truth.

“Now, while it makes for great tabloid selling headlines; the story that President Goodluck Jonathan and his brother or kinsman or friend, Etete, stole over a $1billion of Nigeria’s money, nothing can be further from the truth. I can say this confidently because if any one of those mainly online junk journalists had bothered to investigate beyond what my detractors had bribed them to propagate, they would realise that not a cent of the money in question outside of the renegotiated signature bonus of $210million and the profit taxes to be paid during the lifetime of the oil blocks operation, belonged to the Nigerian state.

“The initial award on a sole risk basis (as explained earlier) to Malabu Oil and Gas, the Petroleum Act of 1969 and its subsequent amendments, the Federal High Court by its judgment that returned the block to Malabu, the settlement agreement between Malabu and the federal government in 2006 bare ample witness and confirmation of this.

“The block in question has no scintilla of government equity within it and government had expended not a dime of the over $500million that had gone into it’s exploration that discovered the actual reserves that reside in the asset and government had no time whatsoever within the life of the asset, sought to implement any back-in rights it might claim to have on the asset.

“For anyone in their right mind to aggregate ownership of the block to Nigerian government outside of the giant signature bonus and profit taxes it has received and will receive throughout the life of OPL 245, likens the Nigerian government to a shop keeper who still claims ownership of goods in his customer’s home cupboard long after same has been paid for, receipted and transported home.

“It is therefore curious that some people who live in the dark fringes of our national life have spread unfounded propaganda through their equally dark agents of misinformation, that money that should have been used for hospitals and roads was what one man called Etete took for himself and shared amongst his friends, associates and playmates.”

 He also said the Abacha family has no shareholding interest in Malabu Oil and Gas Limited.

The past minister said: “In any case, I Dan Etete, I’m not now nor have I ever been a director or shareholder in Malabu Oil and Gas, and historical or current checks at the Corporate Affairs Commission (CAC) by anyone who values the truth can confirm this.”

According to him, the company did not know how rich the area covered by the OPL was as at the time it applied to acquire it.

He said: “The award of OPL 245 to Malabu Oil and Gas was done in 1998 on a Sole Risk basis and for a signature bonus of $20million and it is very important that these dates and terminologies be understood by as many as are willing to maintain an open mind.

 “A sole risk asset as the name suggests is one in which the awardee is solely responsible for prospecting, exploring, searching, working and detecting any overt or hidden deposits within the area of interest awarded without any recourse to the government who awarded the licence. In essence, this means that if you spend your last $1million which is your entire inheritance or fortune on the asset and after a long and difficult exploration programme, you come up empty, you would have done so at your sole risk and nobody will entertain any request for refund of exploration costs, so it was in your interest to do everything in your power to ensure that your investments were not lost, including moneys paid as signature bonus. Conversely, in the event that your exploration efforts are successful, you are also entitled to keep a 100 per cent of your recovery subject to the government exercising its back-in rights.”


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