THE CIRCUMSTANCE surrounding the payment of US$ 1,092,040,000 (about N155 billion) to Malabu Oil and Gas, a Nigerian indigenous company may not exactly fit into illegality; it nevertheless leaves much to be desired in terms of public morality, accountability and transparency. More than that, it typifies a classical official endorsement of public officers' abuse of their offices and the trust reposed on them by ordinary citizens. Malabu has sought to justify its ownership of the oil block in issue on the premise that it only heeded government's call for indigenous participation in the upstream sector of the oil industry. It insisted that it complied with all necessary conditions and payments, including a clause that foreign participation in the block should not exceed 40 per cent. The question however is whether it is morally appropriate for serving officers to influence the award of oil blocks or juicy contracts to themselves or their cronies, as is suspected in this case. Nigerians will ultimately have to bear the brunt of the payment the company received.On August 16, 2011, the Federal Government paid Malabu Oil and Gas, a company in which a former petroleum minister allegedly had an interest, US$ 1,092,040,000 (about N155 billion) as part of an out-of-court settlement of a long running legal dispute over the oil block, OPL 245. Malabu won the allocation for the block during Dan Etete's tenure as petroleum minister in 1998. This allocation was cancelled in 2001 over alleged failure of the company to fully pay the signature bonus, and failure to develop the field. It was reallocated to Shell Nigeria Exploration and Production Company Limited (Shell) and Nigeria Agip Exploration Limited (Agip) after a successful bid.Malabu had challenged the 2001 reallocation of OPL 245 to Shell and Agip at the High Court in Abuja. Following the court's decision, Malabu appealed. The Federal Government, the defendant in the case, decided in 2006 to settle the case out of court rather than contest Malabu's appeal. But the Obasanjo and Yar'Adua administrations refused to compensate Malabu for the reallocation. Shell had also initiated a suit in the Federal High Court, Abuja as well as an arbitral proceeding at the International Centre of the Settlement of Investment Disputes in Washington DC to prevent the reallocation of OPL 245 to Malabu. In 2010 when Dr. Goodluck Jonathan became Acting President, the company asked the Federal Government to compensate it for the reallocation of OPL 245 and for agreeing to withdraw Malabu's appeal against the Federal High Court's ruling. Finally, the Federal Government arranged for Shell and Agip to pay Malabu US$ 1,092,040,000, in return for Malabu's waiving of all claims to any interest in the controversial block. The Minister of Justice, Mr. Mohammed Bello Adoke, has made the claim that the role of the Jonathan administration as a 'facilitator of the resolution of a long-standing dispute' is a demonstration of 'its commitment to attract investment in the oil and gas sector of the economy and encourage genuine investors'!'This is hardly credible, especially in view of the circumstances surrounding the matter. The Jonathan administration has exhibited profoundly disturbing and confounding enthusiasm to reward suspected abuse of office, which, in other climes would attract sanctions. Nigerian Civil Service Codes forbid public servants from dispensing their duties to create benefits for themselves. On taking office, ministers swear to an oath that forbids the conversion of official duties and responsibilities to personal advantage. Yet, many officers routinely award juicy contracts to themselves through proxies, and to their relatives and friends. That the Obasanjo and Yar'Adua administrations did not charge anyone for such an abuse of office is a reflection of the kid-gloves with which corruption is treated in Nigeria. In brokering the payment of US$ 1,092,040,000 to Malabu, the Jonathan administration portrayed government's complicity in the country's long history of openly rewarding flawed process.The President speaks of transformation but continues the practices that have made Nigerians desperately poor, hopeless and woefully governed. The intent of allocating (often) smaller oil blocks to indigenous firms, a policy initiated in the early 1990s, is to develop technical and commercial capacity in prospecting for oil and developing oil fields, a multi-million dollar business. In practice, bureaucrats and politicians in charge of the oil industry have often awarded oil blocks to friends and family who have no knowledge, and sometimes, are unwilling to acquire any knowledge of the industry. These people become billionaires by selling allocations of oil blocks to foreigners rather than developing companies that will grow local expertise. Malabu's situation may be particularly brazen but it is hardly unique. Oil blocks have become perks of office. Sadly, legislation or policy promoting indigenous economic capacity is nearly always abused to benefit the rich and corrupt in our society. If the oil in Nigeria was owned by communities in which they are found, which is the case in many parts of the world, and used to be with mineral and agricultural resources pre-centralised federalism, it is doubtful if oil blocks would be bestowed as gifts to shadowy companies owned by state elites. How are the livelihoods and capabilities of 163 million Nigerians, especially the poor and hungry in the Niger Delta, enhanced when their government arranges the payment of US$ 1,092,040,000 to a company' This is income lost to Nigeria as Shell and Agip, not being charities, will recoup this amount they have somehow agreed to pay to settle a case out of court. This can only happen in Nigeria. A model that reconciles justice with economic efficiency and conforms to authentic federalism is to allow ownership and governance of oil to revert to Nigerian communities who will pay significant taxes to the Federal Government. This should be high on the agenda of politicians and political parties who truly mean to transform Nigeria.
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