$1.1 billion Malabu oil scam: Dan Etete, And 12 Others Faced With Jail Terms In Italy

A former Minister of Petroleum Resources, Dan Etete, and 12 others are faced with jail terms in Italy over their alleged involvement in the $1.1 billion Malabu oil scam in Nigeria.

The prosecutors filed the notice in a Milan court last week, one week after Etete was charged by the Economic and Financial Crimes Commission (EFCC) in Abuja for his role in the Oil Prospecting License (OPL) 245.

Dutch investigators have also begun the probe of Shell’s alleged involve ment in the scam. Shell and Eni have invested at least $1.8 billion in purchasing and developing the oil bloc, which they own 50 per cent apiece.

The oil bloc reportedly holds probable reserves of 9.23 billion barrels of oil, which if proven, would represent the equivalent of a third of Shell’s proven reserves and two-thirds of Eni’s. The administration of former President Goodluck Jonathan had approved the transfer of $1.092 billion from Nigeria’s JP Morgan account in London to Nigerian accounts controlled by Malabu, a company controlled by Etete.

Based on Eni’s involvement, Italian prosecutors filed a notice in a Milan court last week to begin criminal charges and prosecution of Etete.

Another Nigerian identified as Chukwuemeka Obi, is also among the 11 individuals to be charged by the Italian authorities.

Shell and Eni are also to be sued, making a total of 13 defendants in the criminal suit. EVP, a company owned by Obi, had, together with its owner, laid claim to about $110 million of the $1.1 billion paid by Shell and Eni for the oil bloc considered Nigeria’s richest oil bloc.

The money is currently trapped in Switzerland where it has been frozen by a court. Obi had sued Malabu for the $110 million in London, which he said was his entitlement for helping to facilitate the deal between the oil majors and Malabu.


In July 2013, the High Court of Justice, Queen’s Bench Division, presided by Lady Justice Gloster, ruled in favour of Obi that he was entitled to “a fee of 8.5 per cent of the total disposal consideration of $1.3 billion.”

The EFCC slammed a seven-count charge of money laundering and fraud on Etete and others on December 20 at the Federal High Court, Abuja.

The anti-graft agency had earlier quizzed the Managing Director of Shell Nigeria Exploration and Production Company Limited (SNEPCO), Mr. Bayo Ojulari, over the controversial deal, specifically to determine whether the cash had been used for the settlement of the dispute on the oil bloc or diverted elsewhere.

EFCC is specifically seeking the whereabouts of $1.092 billion paid by SNEPCO and Nigeria Agip Exploration Limited (NAE) into an escrow account.

Royal Dutch Shell (RDSa.L) confirmed that Dutch investigators recently visited its headquarters in The Hague, Netherlands, in relation to an investigation into the offshore oil field.

“Representatives of the Dutch Financial Intelligence and Investigation Service and the Dutch Public Prosecutor recently visited Shell at its headquarters,” a spokesman said.

The visit, he added, “was related to OPL 245, an offshore block in Nigeria that was the subject of a series of long-standing disputes with the Federal Government of Nigeria.”

“Shell is cooperating with the authorities and is looking into the allegations,” the spokesman said. Etete had, last year, approached the British court and asked that $85 million (N17 billion) be returned to his company, Malabu.

A British judge, on December 15, 2015, however, refused to release the money to Malabu. In refusing to release the money, Justice Edis of the Southwark Crown Court declared that he was not sure the administration of President Jonathan acted in Nigeria’s interest when it approved the transfer of the money to Malabu.

“I cannot simply assume that the FGN, which was in power in 2011 and subsequently until 2015, rigorously defended the public interest of the people of Nigeria in all respects,” the judge ruled.

The $85 million was seized at the request of Italian prosecutors, who are also investigating the deal.

The money was the last part of the OPL 245 largesse not yet distributed. While Etete argued that the money be released to him, the Italian prosecutor argued that “their investigation could lead to a potential forfeiture of the money down the road.”

Meanwhile, the House of Representatives has said the prosecution of some persons and com-panies linked to the controversial $1.1 billion award of Oil Prospecting Licence (OPL) 245 by the EFCC, as well as the planned prosecution of Etete by the Italian government, will not deter it from completing the ongoing investigation into the alleged scandal.

The House ad hoc committee on Malabu oil deal, headed by Hon. Razak Atunwa (APC, Kwara), is currently investigating the sale of the oil bloc.

The EFCC had, on December 20, before a Federal High Court sitting in Abuja slammed a sevencount charge of money laundering and fraud against Etete and others.

In a chat with New Telegraph, a principal officer, who preferred anonymity, vowed that the House would not abandon the investigation in spite of the court cases.


“The House is empowered by the constitution, which is the ground norm to carry out any investigation under the sun and we can invite any individual, no matter how highly placed, to testify before any of our committees.


“So, the ad hoc committee is going ahead with the investigation. No court has asked us (House) to suspend the investigation and of course, none will even contemplate that.


When we resume in January, the ad hoc committee will reopen its investigation and we must get to the root of these allegations,” he stated.

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