EXPLAINER: What exactly is the Malabu Oil controversy and how did it come to be?

The Malabu Oil controversy is not exactly breaking news as it has raged on and off for more than a decade. But from time to time, a new piece of information regarding it is made public and it resurrects the issue, the latest being the accusation by one of the parties involved that former President Goodluck Jonathan might have received up to $200m in bribes to approve the deal.

[Read also: The BBC report on the Malabu oil deal that everyone is talking about (WATCH)]

But how did this scandal come to be?

  • 1998: Chief Dan Etete, who was the Petroleum Minister in the government of General Sani Abacha awarded a deep offshore block, OPL 245 to an unknown company called Malabu Oil, which turned out to be owned by him. For this lucrative oil block said to contain at least 9 billion barrels of oil (worth $500bn at current oil prices), Malabu Oil paid a paltry $20m signature bonus (a payment which oil companies make to governments as an indication of their seriousness to develop the block. It is also seen as a marker of the value of the oil block).
  • 2001: Malabu Oil decides to sell 40% of the block to Shell (It is a common practice in the Nigerian oil industry where local companies who are awarded oil blocks sell a part to international oil companies so that the IOCs become the technical operators). However, the Federal Government led by Olusegun Obasanjo revokes Malabu’s oil block award altogether, and Malabu takes this to court.
  • 2002: The Federal Government awards 100% of the block to Shell, which then pays a higher signature bonus of $210m.
  • 2006: The FG & Malabu Oil reach a deal where Malabu pay $210m and has the oil block ownership restored to them. Shell challenges this in court.
  • 2011: After five years of litigation, Shell and Italian oil company, Eni pay the FG $1.3bn for full control of the oil block. $1.1bn of that money then goes to Malabu Oil.
  • 2012: The Economic and Financial Crimes Commission (EFCC) launches an inquiry into the deal.
  • 2013: The UK Proceeds of Corruption Unit launches its own investigation into the case.
  • 2014: The Public Prosecutor of Milan in Italy launches its own investigation into the case with an emphasis on alleged bribery involving the CEO of Eni and his immediate predecessor as suspects. He also freezes $190m from the deal in UK and Switzerland.
  • 2015: Dan Etete is invited by the EFCC and interviewed regarding the case.
  • 2016: The EFCC files charges against Etete, former Attorney-General Mohammed Adoke and businessman Aliyu Abubakar (said to have been a front for Adoke) for the roles they played in the case. Adoke’s role was in approving the transfer of $1.1bn to accounts controlled by Etete. A week after the EFCC filed charges, Italian authorities announced they were set to charge Etete, one Chukwuemeke Obi and 13 others for their roles in the scandal. Obi had previously sued Malabu Oil in London for $110m which he claims is his entitlement for helping to facilitate between the IOCs and Malabu.
  • 2017: EFCC files a three-count charge against Shell and Eni for their roles in the scam in March.

[Read also: Jonathan denies receiving $200m from Malabu deal, calls it fake news]

So far, this scandal stretches across three governments with major players from all governments, including two former presidents mentioned as benefiting from it. It is the subject of five court cases and ongoing investigations in three countries and is capable of bringing down not just politicians in Nigeria, but also the foreign companies involved.

It is far from over, and as the scandal continues to unfold, it is inevitable more details will emerge.

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