THE EXPLAINER: What You Should Know About Adoke And The $1.2bn Malabu Oil Scam
The Economic and Financial Crimes Commission (EFCC) on December 19, 2019, arrested Mohammed Adoke, a former Minister Of Justice and Attorney General of the Federation under the administration of ex-president Goodluck Jonathan for his alleged involvement in the $1.2 billion Malabu Oil Scam. Jonathan served as president between 2010 to 2015.
What is the Malabu Oil Scam?
The Malabu oil transaction started in 1998 when the military administration of Sani Abacha came up with the policy of encouraging indigenous participation in the upstream sector of the oil and gas industry.
Oil blocks were allocated to indigenous companies at a reduced signature bonus of $20 million.
Subsequently, the Oil Prospecting License (OPL 245), was allocated to Malabu Oil and Gas Limited owned by Dan Etete, former petroleum minister under Abacha. OPL 245 located in the Niger Delta is believed to be the most valuable oil field in West Africa.
Malabu paid an initial $2 million for the signature bonus and brought in Shell as technical partners.
The sale of OPL 245 to Malabu was nullified by former President Olusegun Obasanjo in 1999 and assigned to Shell and ENI without a public bid.
Etete’s Malabu Oil and Gas, however, reclaimed the oil block in 2006 through the court. While Shell challenged the decision, a ‘fraudulent settlement and resolution’ was consummated under President Goodluck Jonathan’s government, with Shell and ENI buying the oil block from Malabu in the sum of $1.3billion.
However, Shell and ENI did not want to deal directly with Etete, who had been convicted in France for his part in a separate money-laundering scandal, so they sent the money to an account belonging to the Federal Government of Nigeria in JP Morgan bank, London.
The Jonathan government then reportedly transferred $801 million of the money into accounts controlled by Malabu and Etete in Nigeria.
The balance was said to be shared with various public officials in Nigeria as bribes while the government got only the sum of $210m USD as a signature bonus on OPL 245.
Officials accused of receiving bribes in connection with the deal include Goodluck Jonathan, former Nigerian Attorney General, Mohammed Bello Adoke and former petroleum minister, Diezani Alison-Madueke.
Former President Jonathan is alleged to have received up to $200 million which he denied.
Investigations by the EFCC into the deal revealed crimes that border on conspiracy, forgery of bank documents, bribery, corruption and money laundering to the tune of over $1.2 billion against Malabu Oil and Gas Limited, Shell Nigeria Limited culminating in criminal charges against Adoke, Etete and others, which are pending at both the FCT High Court and the Federal High Court, Abuja.
The Economic and Financial Crimes Commission (EFCC) brought back the Malabu case in 2017, seeking a court order to return OPL 245 to the federal government an order which was granted by the federal high court, Abuja in January 2017.
Justice John Tosho held that the ownership of the block should return to Shell and ENI after an appeal but the EFCC is ready to see the case through counter appeals.