Economy

US Seeks Reopening Nigeria’s Controversial OPL 245 Case Against Shell, Eni

Published

7 months ago

24/05/2024

By Adedapo Adesanya

The United States is pushing for the reopening of an investigation against multinational oil companies Shell and Eni in Nigeria regarding their 2011 purchase of the rights to the controversial Oil Prospecting License (OPL) 245.

OPL 245 is regarded as one of Nigeria’s most lucrative oilfields and has seen a fierce battle over it and it appears the issue might not be over as the US House of Representatives through the Foreign Corrupt Practices Act (FCPA) wants to stir the waters again.

In a petition to Mr Merrick Garland, Attorney General of the US, the lower house is urging the reopening of the investigation by the Department of Justice (DOJ).

The House stated that “available evidence implicates both companies in a scheme that resulted in the payment of $1.1 billion in bribes to Nigerian government officials, including then-President Goodluck Jonathan”.

“Shell and Eni, both registered with the U.S. Securities and Exchange Commission (SEC) continue to profit from the deal in violation of the FCPA,” read the letter dated May 8, 2024 and signed by Representative Maxine Waters of the Committee on Financial Services, and Representative Joyce Beatty of the Subcommittee on National Security, Illicit Finance, and International Financial Institutions

The House maintained, in the letter, that “allegations of corruption surrounding OPL 245 began in 1998, when Dan Etete, a convicted money launderer and Nigeria’s former Oil Minister during the military dictatorship of General Sani Abacha, awarded the OPL 245 license to Malabu Oil and Gas, a company whose principal shareholders were revealed to be Etete himself and the son of General Abacha”.

The rights to OPL 245, according to the petition from Congress, continued to be marred with corruption and in 2000, Malabu’s share registry was changed to reflect a 505 shareholding by Pecos Energy, a company secretly controlled by then-President Olusegun Obasanjo and his Vice President, Mr Atiku Abubakar.

The letter stated that Malabu’s license was revoked in 2001 but restored in 2006, with evidence suggesting that bribes were paid to then-Attorney General, Mr Bayo Ojo, who played a key role in that decision.

The House alleged that Shell and Eni then purchased the license from Malabu in 2011 for $1.3 billion with the knowledge that a portion of the proceeds would be used to bribe numerous Nigerian officials. It added that hundreds of millions of Dollars passed through various Nigerian shell companies linked to Mr Aliyu Abubakar, a scandalous businessman.

“Then-President Goodluck Jonathan was said to have pocketed some $200 million from the sale, and the former Attorney General involved in the 2006 reinstatement of Malabu’s license also purportedly received a sizeable payout

“Other funds would later be traced to the purchase of real estate in the US, Dubai, Brazil, and Switzerland, as well as luxury vehicles and gems,” the House petition also read.

In further urging the re-opening of the case, the House stated that the harm to the Nigerian people would continue to be felt beyond the immediate payment of bribes, with experts alleging that the country lost $6 billion in estimated future revenue – double the size of Nigeria’s annual health and education budget.

According to the petition, in 2013, there was sufficient evidence for the Federal Bureau of Investigation (FBI) and the money laundering investigation into the deal, which was followed by an FCPA investigation. In 2019, the DOJ notified Eni that the US had closed the inquiries in light of Italy’s prosecution of the case, yet it noted that the file could be reopened if circumstances changed.

The House noted that Shell and Eni were subsequently acquitted by the Italian court yet the companies “continue to profit from their exploitation of the OPL 245 deal.”

“The United States has consistently demonstrated global leadership in the fight against foreign bribery, with the FCPA swerving as model legislation for countries around the world.

“The reopening of the case would further illustrate the US commitment “to aggressively pursue foreign bribery cases,” as stated in the U.S. Strategy on Countering Corruption and reaffirm its pledge to fully implement the OECD Anti-Bribery Convention.

“We urge you to leverage this portent anti-corruption law to address the issues in the case and to send a powerful message that the United States stands vigilant in its pursuit of corporate crime around the globe,” the House petition to the Attorney General further read.

Economy

Afriland Properties Lifts NASD OTC Securities Exchange by 0.04%

Published

4 hours ago

11/12/2024

Adedapo Adesanya

By Adedapo Adesanya

Afriland Properties Plc helped the NASD Over-the-Counter (OTC) Securities Exchange record a 0.04 per cent gain on Tuesday, December 10 as the share price of the property investment rose by 34 Kobo to N16.94 per unit from the preceding day’s N16.60 per unit.

As a result of this, the market capitalisation of the bourse went up by N380 million to remain relatively unchanged at N1.056 trillion like the previous trading day.

But the NASD Unlisted Security Index (NSI) closed higher at 3,014.36 points after it recorded an addition of 1.09 points to Monday’s closing value of 3,013.27 points.

The NASD OTC securities exchange recorded a price loser and it was Geo-Fluids Plc, which went down by 2 Kobo to close at N3.93 per share, in contrast to the preceding day’s N3.95 per share.

During the trading session, the volume of securities bought and sold by investors increased by 95.8 per cent to 2.4 million units from the 1.2 million securities traded in the preceding session.

However, the value of shares traded yesterday slumped by 3.7 per cent to N4.9 million from the N5.07 million recorded a day earlier, as the number of deals surged by 27.3 per cent to 14 deals from 11 deals.

Geo-Fluids Plc remained the most active stock by volume (year-to-date) with 1.7 billion units sold for N3.9 billion, trailed by Okitipupa Plc with 752.2 million units valued at N7.8 billion, and Afriland Properties Plc with 297.5 million units worth N5.3 million.

Also, Aradel Holdings Plc remained the most active stock by value (year-to-date) with 108.7 million units worth N89.2 billion, followed by Okitipupa Plc with 752.2 million units valued at N7.8 billion, and Afriland Properties Plc with 297.5 million units sold for N5.3 billion.

Economy

Naira Trades N1,542/$1 as FX Speculators Dump Dollars in Panic

Published

4 hours ago

11/12/2024

Adedapo Adesanya

By Adedapo Adesanya

The Naira continued to appreciate on the US Dollar at the Nigerian Autonomous Foreign Exchange Market (NAFEM), gaining 0.7 per cent or N10.23 on Tuesday, December 10 to trade at N1,542.27/$1 compared with the preceding day’s N1,552.50/$1.

The Central Bank of Nigeria (CBN)-backed Electronic Foreign Exchange Matching System (EFEMS) platform introduced to tackle speculation and improve transparency in Nigeria’s FX market has been attributed as the source of the Naira’s appreciation.

Speculators holding foreign currencies, particularly the US Dollar, have seen the value of their money drastically drop due to the appreciation of the local currency. This is forcing them to dump greenback into the system and take the domestic currency alternative- a move that has seen available FX increase.

Equally, the domestic currency improved its value against the Pound Sterling in the official market during the trading day by N6.81 to sell for N1,955.12/£1 compared with Monday’s closing price of N1,961.93/£1 and against the Euro, it gained N10.84 to close at N1,613.00/€1, in contrast to the previous day’s rate of N1,623.84/€1.

Data from the FMDQ Securities Exchange showed that the value of forex transactions significantly increased yesterday by $228.85 million or 257.2 per cent to $401.17 million from the preceding session’s $112.32 million.

However, in the parallel market, the Nigerian currency weakened against the US Dollar on Tuesday by N5 to settle at N1,625/$1 compared with the previous day’s value of N1,620/$1.

In the cryptocurrency market, Dogecoin (DOGE) lost 4.8 per cent to sell at $0.39116, Litecoin (LTC) depreciated by 3.3 per cent to trade at $110.25, Binance Coin (BNB) went south by 2.3 per cent to $681.44, Ethereum (ETH) dropped 1.6 per cent to finish at $3,671.08, and Cardano (ADA) slid by 0.5 per cent to $0.8837

Conversely, Ripple (XRP) jumped by 5.4 per cent to $2.23 amid a continued shift for the coin with its parent company seeing the benefits of a crypto-friendly regulatory environment for US-based companies.

XRP is closely related to Ripple Labs, a high-profile payments company targeted by the SEC in 2020 on allegations of selling the token as a security to U.S. investors. Ripple fully cleared a long-drawn court case in 2024.

Further, Solana (SOL) expanded by 0.8 per cent to $219.75, Bitcoin (BTC) grew by 0.4 per cent to $97,446.95, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 each.

Economy

Chinese Demand, Europe, Syria Development Buoy Oil Prices

Published

5 hours ago

11/12/2024

Adedapo Adesanya

By Adedapo Adesanya

Oil prices rose on Tuesday, influenced by increasing demand in China, the world’s largest buyer, as well as developments in Europe and Syria, with Brent crude futures closing at $72.19 per barrel after chalking up 5 cents or 0.07 per cent while the US West Texas Intermediate finished at $68.59 a barrel after it gained 22 cents or 0.32 per cent.

China will adopt an “appropriately loose” monetary policy in 2025 as the world’s largest oil importer tries to spur economic growth. This would be the first easing of its stance in 14 years.

Chinese crude imports also grew annually for the first time in seven months, jumping in November on a year-on-year basis.

Speculation about winter demand in Europe also contributed to the rise in prices as the period has been known for high demand.

In Syria, rebels were working to form a government and restore order after the ousting of President Bashar al-Assad, with the country’s banks and oil sector set to resume work on Tuesday.

Although Syria itself is not a major oil producer, it is strategically located and has strong ties with Russia and Iran – two of the world’s largest oil producers.

Market analysts noted that the tensions in the Middle East seem contained, which led market participants to price for potentially low risks of a wider regional spillover leading to significant oil supply disruption.

The market is also looking forward to the US Federal Reserve, which is expected to make a 25 basis point cut to interest rates at the end of its December 17-18 meeting.

This move could improve oil demand in the world’s biggest economy, though traders are waiting to see if this week’s inflation data derails the cut.

Crude oil inventories in the US rose by 499,000 barrels for the week ending November 29, according to The American Petroleum Institute (API). Analysts had expected a draw of 1.30 million barrels.

For the week prior, the API reported a 1.232-million barrel build in crude inventories.

So far this year, crude oil inventories have fallen by roughly 3.4 million barrels since the beginning of the year, according to API data.

Official data from the US Energy Information Administration (EIA) will be released later on Wednesday.

Also, the market is getting relief from the recent decision of selected members of the Organisation of the Petroleum Exporting Countries and its allies, OPEC+ to delay the rollback of 2.2 million barrels per day of oil production cuts to April from January. Another 3.6 million barrels per day in output reductions across the OPEC+ group has been extended to the end of 2026 from the end of 2025.