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Wednesday, January 14, 2004
Shell Nigeria Petroleum Exploration Company (SNEPCO), the wholly owned subsidiary of Shell Petroleum Development Company (SPDC), has paid a $210 million signature bonus to acquire block OPL 245 offshore Nigeria. The company has the sole responsibility of exploring and producing hydrocarbons in Nigeria’s OPL 245 deep waters. The payment for the block ends several months of controversy over the ownership of OPL 245.
Ownership of the oil block had been hotly contested by the Nigerian company Malabu Oil and Gas, which claimed that the block was first awarded to it by the then military government of General Abdusalami Abubakar. OPL 245 was one of the numerous oil blocks awarded during the military regime but revoked by President Olusegun Obasanjo on the recommendation of the Christopher Kolade Panel.
Malabu, a company in which former Oil Minister Chief Dan Etete owned a substantial interest, instituted a $1 billion claim against the Nigerian Government and Shell in a New York court. The company also petitioned the House of Representatives in August 2002, seeking for the revalidation of the license. Shell’s response was to file a suit in Federal High Court to stop the hearing at the House.
In the course of the legal struggle over OPL 245, the International Criminal Police Organization (Interpol) last year declared Etete wanted in what was then linked with a case of money laundering, and so ended the legal battle over the block.
The Group Managing Director of the Nigerian National Petroleum Corporation, Engineer Funso Kupolokun, said "OPL 245 went through open tendering and competitive process."
"SNEPCO won the bloc through this process being the highest bidder. The $210 million is the highest paid in the history of acreage allocation in Nigeria," Kupolokun added.
A Shell spokesman who also confirmed the payment of a $210 million check by SNEPCO’s Executive Director, Dr. Kisito Okpere, said that as far as the company was concerned, it acquired the block legally. "We have an official letter awarding the block to us," he said.
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