American Bank, JP Morgan Chase, in $65,500,000 Arbitration Case over Nigerian Oil Block

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Adnan Agaev, a former Soviet diplomat, hired by Malabu Oil and Gas recently settled a $65.5m arbitration case over the Nigerian oil block OPL245 with the American Bank, JP Morgan Chase, behind closed doors.

 

Malabu Oil and Gas, a company associated with Dan Etete, had been awarded OPL245 in 1998 when Dan Etete was Nigeria’s petroleum minister under Sani Abacha. It is reported that Malabu was established a few days before the said award. Also, Malabu only paid $2m of the $20m signature bonus for the oil block.

 

In 2001, the Obasanjo government revoked the Malabu deal, and in 2002 the Obasanjo government re-awarded the oil block to Shell Nigeria Exploration and Production Company Limited. Shell soon commenced exploration in the block. Malabu sued the government, and after a lot of litigation, government reinstated Malabu as the owner of the block in 2006.

 

Malabu proceeded by hiring Mr Agaev to find investors. Mr Agaev, in turn, hired a subcontractor, Emeka Obi, who brought in Nigeria Agip Exploration Limited. Finally, in 2011, Agip and Shell agreed to pay $1.092 billion for the oil block. The $1.092 billion deal was arranged in such a way that Agip and Shell paid the sum to the Nigreian government which then paid $800m to Malabu. Agip's payments to the government were made through an escrow arrangement with JP Morgan Chase.

Case Type

Fraud

Money Involved

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