Documents filed before the United States Supreme Court in New York earlier this year have revealed how the Nigerian Government and oil Giant Shell aided in making Dan Etete, former Petroleum minister convicted on money laundering charges in France, $1 billion richer, the Premium Times revealed.

President Goodluck Jonathan

According to the Times’ report, the documents filed on 22 March 2012 showed that on 29 April 2011, only weeks after his election, Nigeria’s President Goodluck Jonathan discreetly approved the transfer of $1.1 billion to Mr. Etete, owner of Malabu Oil and Gas Ltd, payment for a controversial oil block.

“The money was first paid to the Federal Government by two multinational oil companies: Nigeria Agip Exploration Limited (Agip) and Shell Nigeria Exploration and Production Company Limited (Shell) in respect of oil block OPL 245,” Premium Times wrote.

Upon receiving the funds in the FG account, Jonathan ordered that it be transferred to a London account belonging to Etete’s company Malabu oil, under the agreement that Etete will in return relinquish all claims on OPL 245.

During his reign as Petroleum Minister under late Head of State, Sani Abacha, the money laundering convict awarded his company the oil block in 1998, a move the Nigerian government has repeatedly denounced as it was in violation of procedure.

In 2001, the Federal Government under President Olusegun Obasanjo reclaimed the oil block and a year later allocated the same block to Shell, declaring that Etete had been dubious in his oil block dealings.

Malabu oil took the Federal Government to court in a prolonged legal battle and in 2006, the FG cowered giving the oil block back to Malabu Oil. Shell, angry at the reversal, filed court proceedings in Washington, bring all parties to the controversial $1.1 billion settlement.

Global Witness, a campaign group investigating the seedy transaction wrote in its report:

Court documents from a March 2012 New York arbitration case reveal that Nigerian subsidiaries of both Shell and ENI agreed to pay US$1.092 billion to the Nigerian Government for oil block OPL 245 in the country. At the same time, precisely the same amount was agreed to be paid by the Nigerian Government to Malabu Oil and Gas, a company widely reported as controlled by an Abacha-era minister and convicted money-launderer.

The campaign group revealed that in an agreement between the multinational oil companies and the government, titled “Block 245 Resolution Agreement”, the companies agreed to pay the sum to the government “to settle any existing claims surrounding the ownership of the long-disputed block OPL 245″.

Shell, ENI deny any wrongdoing

Though there is no clear proof of illegality on the part of Shell and ENI, as both companies claim they had no idead the government would be transferring the funds to Malabu Oil, Global Witness says the dealings “begs billion dollar questions” about Jonathan’s willingness to reform the corrupt oil sector and the companies’ commitment to transperency.

In an interview with the Premium Times, communications officer for Shell, Precious Okolobo, insisted that the oil giant “was not aware that that money was to be paid to Malabu”.

He confirmed that the FG allocated the OPL 245 jointly to ENI subsidiary Nigeria Agip Exploration and Shell Nigeria Exploration and Production Company (SNEPCo), adding that “each now holds 50 percent in OPL 245, with NAE as operator of the block.”

“Any payments relating to the issuance of the license were made only to the Federal Government of Nigeria,” the Shell official said and insists that it was “in line with Shell’s information policy, we cannot reveal commercially sensitive information, and hence cannot comment further on the papers filed in the New York court proceedings.”

ENI has also denied in certain terms any “possible agreement” with Malabu Oil, insisting that its dealings as it relates to OPL 245 were with the Nigerian Federal Government.

“No agreements were entered into by ENI with any other third party entity in respect of such acquisition, including Malabu.”

Etete’s Malabu in US court case

Dan Etete

Meanwhile, a the International Legal Consulting firm, ILC, is suing Etete’s Malabu over failure to honour agreement. Ednan Agaev, a Russian lawyer with the firm, claims that the ILC helped Malabu negotiate its backdoor deal with the Federal Government and is owed over $65 million USD.

“ILC contends that it fully performed its obligations under the Fee Agreement entitling it to a 6% success fee amounting to $65,522,400, and that Malabu has indicated that it will not pay this amount,” the company told the court in a sworn affidavit.

Malabu’s court troubles don’t end there. The company is also being sued in a British court by Energy Venture Partners Limited.

EVP, on July 3 2011, obtained a worldwide freezing order against the assets of Malabu in the amount of $215 million and filed claims alleging that Etete’s oil company breached an “Exclusive Agency Agreement” it entered into with EVP on January 27, 2010.

EVP claims Malabu sought its consulting services to find a buyer and negotiate sale of the oil company’s interests in the disputed OPL 245 and further claims that it is owed the sum of $200 million from the sums payable by or on behalf of NAE and SNEPCO.

Attorney General of the Federation, Mohammed Adoke, acting on behalf of the Federal Government refused to pay heed to the assets freeze order. In a letter to the court, dated 16 July 2011, the AGF said “the FGN does not submit to the jurisdiction of the English courts”.