House Recommends Revocation Of Malabu Oil Contract

SAN FRANCISCO, December 17, 2013, (THEWILL) -  The House of Representatives ad hoc committee, set up to probe the transaction between the Federal Government and Shell/Agip companies and Malabu Oil and Gas Limited in respect of Oil Block OPL 245, has recommended that the deal be revoked by the Federal Government. The recommendation came even as protest trailed the planned consideration of the report on Tuesday forcing the House leadership to shift it till Wednesday. The consideration was scheduled for Tuesday but when it came up for the clause-by-clause consideration following a motion by the Deputy Majority Leader, Hon, Leo Ogor, some members picked holes in the process as they complained that some of them had no copies of the report and would like to study it before consideration. Deputy Speaker, Hon. Emeka Ihedioha, who presided over the committee of the whole was therefore forced to step down the report and ordered that it be slated for Wednesday. The report had elicited heightened emotions from some of the lawmakers, including Robinson Uwak, who raised a point of order protesting the rationale for its consideration when members had not been served with copies of the 70-page document for advance perusal and detailed understanding in line with the House' standard operating practice. The report recommended that the Federal Government of Nigeria should cancel OPL 245 recently granted to Shell Nigeria Exploration and Production Company limited (SNEPCO) (50 percent) and AGIP (50percent), as it was based on a highly flawed 'Resolution Agreement' entered into between Malabu Oil and Gas, SNEPCO and Nigeria Agip Exploration (NAE) with the Federal Government acting as obligor. It stated: "The 'Resolution Agreement' ceded away our national interest and further committed Nigeria to some unacceptable indemnities and liabilities while acting as an obligor. Indeed, clause 17 of the resolution agreement commits the Federal Government of Nigeria to indemnify, and even defend Shell Nigeria Ultra Deep ltd (SNUD), SNEPCO and NAE from and against "all suits, proceedings, claims, demands, losses and liability of any nature or kind, including but not limited to all litigation costs, attorney's fees, settlement payments, damages and all other related costs and expenses, based on, arising out of,  or in connection with" the 'Resolution Agreement' and or the issuance of the Oil Prospecting License in respect of Block 245. 'That the Federal Government through the Ministry of Petroleum Resources and the Office of the Attorney-General of the Federation facilitates a new 'Resolution Agreement' in line with the Petroleum Act, and the Indigenous Concession Programme (ICP) of Government that guided the initial allocation of OPL 245 to Malabu Oil.& Gas, as a situation where the 'Resolution Agreement' diverted 100 percent of the beneficial ownership to two foreign-based companies is contrary to our national aspirations. Indeed the 'Resolution Agreement' should acknowledge Nigeria' s national interest in the huge deposits existing in the Block; 'That the House should direct the Committees on Petroleum Resources (Upstream), Petroleum Resources (Downstream), Gas Resources- and Local Content to liaise with the Ministry of Petroleum Resources to make-available a comprehensive list of similar ventures with Petroleum Sharing Agreement or contract without Nigeria National Petroleum  Corporation (NNPC) participation, for necessary remediation; 'That AGIP Nigeria Agip Exploration Ltd (NAE) be formally censored or reprimanded by the House for its role in the 'Resolution Agreement' which lacked transparency and did not meet international best business--practices. The 'Resolution Agreement' was meant to resolve existing disputes between the various parties, which even by AGIP's acknowledgment they are not party to the disputes, in the process, they cornered 50 percent  equity in Block 245; 'That Shell Nigeria Ultra Deeps (SNUD) be censored or reprimanded by the House for its lack of transparency and full disclosure in its bid to acquire OPL 245; 'That the ownership structure of Malabu Oil and Gas Ltd. flowing from our findings and the Economic and Financial Crimes Commission (EFCC)' s interim report is as-follows: (a)  Mohammed Sani (Aba'cha) (or his Successors in title) ~ 50 percent, (b)  Kweku Amafegha (Dan Etete)(or his Successors in title) - 30percent, and (c) Pecos Energy Ltd - 20 percent. 'That the Nigerian Police Force should take over the on-going investigation on the matter of forgery and alteration of documents indicting- some Directors of Malabu Oil & Gas Ltd who resigned their positions or transferred their appointments or shares without their authorisation, and initiate prosecution of any person indicted; 'That in line with global best practices, accountability and transparency, individuals and financial institutions linked with and found culpable by the Economic and Financial Crimes Commission (EFCC) of receiving and transferring money unlawfully with respect to or arising out of the 'Resolution Agreement', should be charged to an appropriate court of competent jurisdiction, and any such monies unlawfully transferred should be recovered; 'That in the redraft of a new 'Resolution Agreement', Nigeria's tax laws should be respected, and consequently where applicable, the Federal Inland Revenue Service (FIRS) should take all necessary steps to impose Capital Gains Tax on Shell (Shell Nigeria Exploration and Production Company Ltd (SNEPCO.) - Shell Nigeria Ultra Deep Limited (SNUD) transaction as the payment or reimbursement of $355,000,000 from Shell Nigeria Exploration and Production Company Ltd (SNEPCO) to Shell Nigeria Ultra Deep Limited (SNUD) contained in the 'Resolution Agreement' is clear evidence of some form of alienation or transfer of interest that satisfies the requirement for tax purposes.'' By Saint Mugaga, Abuja