Despite reports that the operating license of the controversial oil prospecting license (OPL) 245, popularly called Malabu, which expired early this month, has since reverted to the Federal Government, the Italian oil firm, ENI, on Wednesday still claimed right to the ownership of the oil concession.
Reports had it that the validity of offshore oil prospecting licence expired on May 11, 2021.
Consequently, civil society campaigners, Global Witness, was quoted to have speculated that the expiry of the license meant ENI would yield control of the oil field to the Nigerian government in line with standard industry practice.
The groups quoted ENI as confirming the expiry of the license at its 2021 annual general meeting, although its still hanging on provision of the license agreement guaranteeing its back-in right.
The groups, including HEDA, Re:Common, Corner House and Global Witness, applauded President Muhammadu Buhari for his insistence that further development in the oil field cannot proceed until the corruption cases preferred against ENI and Shell Executives were concluded.
“The license for the oil block, estimated to hold about 482 million barrels of economically recoverable oil, expired on May 11, ten years after Shell and ENI paid $1.3billion for the license in a scandal plagued deal that sparked numerous criminal investigations and trials.
“Despite the expiry of the license, the field has been booked as an asset in ENI company’s accounts for 2020.”
“However, the company acknowledges that this may need to be re-assessed “when preparing the next financial information,” the group said.
Although the group said ENI had requested in 2018 that Nigeria converted the licence to a fresh oil mining license, as part of the government approval process necessary to allow drilling operarions to move ahead, it said President Buhari in March 2019 rejected the request.
In rejecting ENI’s request, the groups said Buhari insisted that no further correspondence would be entertained on the issue until the criminal and civil court proceedings in both Milan and London relating to the 2011 deal were concluded.
“Since Buhari’s reply, ENI’s and Shell’s Nigerian subsidiaries have also been charged in Nigeria with corruption over the deal, although they have denied wrongdoing, while the trial is continuing.
Regardless, in its reaction on Wednesday, ENI said contrary to reports by the civil society groups “the Nigerian Government has since confirmed its support to the its request for the conversion of the license and the exercise of the back in rights included in the 2011 agreement.”
The statement by ENI read:
“With regards to the statement issued by some NGOs on Nigerian OPL245 , ENI would like to point out that the Nigerian Government’s position on the licence is currently subject to an arbitration proceeding in Washington at the International Centre for Settlement of Investment Disputes (ICSID), which commenced in 2020.
“In fact, ENI (through its subsidiary NAE) submitted its application for conversion of the OPL (Oil prospecting Licence) into an OML (Oil Mining Licence), and the Nigerian Government confirmed its support to the conversion and the exercise of the back in rights included in the 2011 agreement:
“In this regard, we confirm that there are no legal impediments to the completion of the conversion process.
“However, to date the government has neither granted, nor rejected, NAE’s application for conversion.” “Please note that the investments made by ENI and Shell to date in OPL245 amount to $2.5 billion.
“Furthermore, the Milan and London Court proceedings on OPL245 have been concluded without ascertaining any international corruption activity, while neither in the OPL245 trial in Milan, nor in other proceedings, the Government of Nigeria has challenged the validity of the licence”.
However, the civil society geoups have insisted the licence expired prior to the conclusion of the Milan and Nigerian court proceedings.
In March 2021, Shell, ENI executives were acquitted in Milan on charges of alleged international corruption over the deal.
But the groups said the case may not have concluded, as a decision on whether or not the Milan Prosecutor would appeal is yet to be reached.
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