Nigeria's House of Representatives ad-hoc committee set up to investigate the sale of deepwater oil block OPL 245 to Royal Dutch Shell and Italy's Eni has recommended that the government revoke the licence, the head of the committee said in a statement late Wednesday.
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The agreement sealed between Shell and Eni and the Nigerian government in 2012, "was contrary to the laws of Nigeria," according to the statement.
"[The committee] recommended that the Federal Government should cancel OPL 245 licence granted to Shell Nigeria Exploration and Production Company because of its flawed resolution agreement," chairman of the committee, Leo Ogor, said in the statement.
The committee, which has completed the probe, was set up to look into complaints lodged by an indigenous Nigerian company, Malabu Oil and Gas, as well as rights groups which said the award of the block to the foreign companies was not a transparent deal.
Shell and Eni paid $1.09 billion to acquire 50% stakes each in Oil Prospecting License 245, Platts previously reported. The two companies agreed to pay the money to Malabu Oil and Gas, which was originally awarded the block, estimated to hold around 1 billion barrels of oil. Ownership of the license had pitched Shell against Malabu, leading to lawsuits and international arbitration with the Nigerian government.
The Wednesday statement said that the committee also recommends sanctions on Shell's Nigerian producing unit for "a lack of transparency in its bid to acquire" OPL 245.
"The committee equally recommended that [ENI] be formally censured or reprimanded by the House for its role in the 'Resolution Agreement' which lacked transparency," Ogor said in the statement.
Both Shell and Eni in Nigeria declined to comment on the committee's recommendations.
A global anti-corruption crusader Global Witness in late 2012 said that Shell and Eni may run foul of UK legislation over the acquisition of the oil block, on grounds that the the transaction ran counter to the anti-bribery legislation in the UK as well as the US and Italy, since the payment ended up with a company controlled by Etete, who had been convicted in France for money laundering, Platts previously reported.
"Though Shell and Eni paid the Nigerian government, funds were then transferred shortly after to a company controlled by ex-Oil Minister, Dan Etete, who in 2007 was convicted in France of money laundering," the group said.