Italy: Shell & Eni to stand trial over role in massive bribery scheme related to $1.3bn oil deal in Nigeria

oil field

In December 2017, an Italian judge has ordered Royal Dutch Shell and Eni to stand trial on charges of aggravated international corruption for their role in a 2011 $1.1bn deal for Nigerian oil block OPL 245, known to be the largest untapped oil field on the continent. Eni'd current CEO, former CEO and a chief operations and technology officer, as well as four Royal Dutch Shell staff members were also ordered to face trial.The judge set March 5 as the date for the trial to begin.

The Milan public prosecutor's investigation followed a complaint filed in 2013 by Global Witness, The Corner House, Re:Common and Nigerian anti-corruption campaigner Dotun Oloko. The case has also been investigated in Nigeria and the United States, and public prosecutors in The Netherlands are also investigating the case.

In April 2017, Global Witness and Finance Uncovered published a report alleging that Shell and Eni participated in a vast bribery scheme for OPL 245, and that top executives at Shell knew that money paid as part of the deal would end up in the hands of a convicted money launderer and former oil minister of the country, Dan Etete, who had awarded the oil block to his own company, Malabu Oil & Gas in 1998. According to Global Witness and Finance Uncovered, the deal, fraught with corruption, deprived the Nigerian people of $1.1billion, an amount worth more than Nigeria’s entire health budget for 2016.


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20 December 2017

Eni: Opl 245, Board of Directors expresses full confidence in the correctness and integrity of both the company’s and chief executive’s actions

Author: Eni

The Board of Directors of Eni notes the decision made by the preliminary hearing judge at the court of Milan to send the company, its chief executive and a number of managers to trial on a charge of international corruption related to the acquisition, in 2011, of a stake in the OPL 245 licence in Nigeria.

Eni’s Board of Directors has reaffirmed its confidence that the company was not involved in alleged corrupt activities in relation to the transaction. The Board’s decision was also taken on the basis of the results of independent advisors’ investigations. The advisors were appointed to examine all relevant resolutions and documents deposited within the closing of the Milan prosecutors’ investigation in 2016.

The Board of Directors also confirmed its full confidence that chief executive Claudio Descalzi was not involved in the alleged illegal conduct and, more broadly, in his role as head of the company.

Eni expresses its full confidence in the judicial process and that the trial will ascertain and confirm the correctness and integrity of its conduct.

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20 December 2017

Judge orders biggest corporate bribery trial in history against Shell, Eni, CEO and executives

Author: Global Witness

Royal Dutch Shell and Italian oil giant Eni have been ordered to stand trial in Milan on charges of aggravated international corruption for their role in a 2011 $1.1bn deal for Nigerian oil block OPL 245. ...Eni [executives and] current [and former] CEO were also ordered to face trial alongside four Royal Dutch Shell staff members... and two former MI6 agents employed by Shell.

No company as large as Royal Dutch Shell or such senior executives of a major oil company have ever stood trial for bribery offences.

The investigation by the Milan public prosecutor was triggered by a complaint filed in Autumn 2013 by Global Witness, The Corner House, Re:Common and Nigerian anti-corruption campaigner Dotun Oloko. The case has also been investigated in Nigeria and the United States following the groups’ complaints. Public prosecutors in The Netherlands are also investigating the case.

“The Nigerian people lost out on over $1 billion dollars, equivalent to the country’s entire health budget, as a result of this corrupt deal. ...said Simon Taylor... of Global Witness

...Nigerian authorities have also filed charges against a Shell subsidiary and Eni as well as several of their staff....The Nigerian government has also issued a billion dollar civil claim against JP Morgan for their role as a banker to the deal. JP Morgan has stated that they consider the allegation against them to be “unsubstantiated and without merit”.

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20 December 2017

Shell and Eni to Be Tried Over $1.3 Billion Nigerian Oil Deal

Author: Stanley Reed, New York Times (USA)

An Italian judge ruled on Wednesday that two of the world’s largest oil companies, Royal Dutch Shell and Eni... must go on trial on charges of corruption over a $1.3 billion oil deal in Nigeria.

The judge set a March 5 trial date in Milan for the companies as well as a group of current and former executives, including Claudio Descalzi, Eni’s chief executive, and Malcolm Brinded, a former chief of exploration and production for Shell. No current Shell officials were to be tried in the case.

Both companies have denied wrongdoing...

...The case stems from a long-running investigation by Italian prosecutors into the two companies’ purchase in 2011 of a potentially lucrative offshore tract called OPL 245 in the Atlantic Ocean off Nigeria.

The payment to the Nigerian government was intended to resolve a dispute over the tract, which was also claimed by a company called Malabu Oil and Gas. That company has been linked to a former Nigerian oil minister, Dan Etete. The Nigerian government, in turn, agreed to pay $1.1 billion to settle Malabu’s claims.

The Dutch police raided the offices of Royal Dutch Shell last year as part of the investigation.

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20 December 2017

Shell comments on decision to indict the company over OPL 245 settlement

Author: Shell

Royal Dutch Shell plc today made the following statement in response to the decision by the Judge of the Preliminary Hearing of the Tribunal of Milan in Italy to remand the company for trial for alleged offences related to Oil Prospecting Licence (OPL) 245 in Nigeria:

“We are disappointed by the outcome of the preliminary hearing and the decision to indict Shell and its former employees.  We believe the trial judges will conclude that there is no case against Shell or its former employees.

“Shell attaches the greatest importance to business integrity. It’s one of our core values and is a central tenet of the Business Principles that govern the way we do business. Shell has clear rules on anti-bribery and corruption and these are included in our Code of Conduct for all staff. There is no place for bribery or corruption in our company.”

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26 November 2018

Nigeria: Consultants estimate government lost nearly $6bn in 2011 oil deal with Shell and Eni

Author: Anjli Raval, Financial Times

"Nigeria 'lost billions' on oil deal with Shell and Eni", 26 November 2018.

Resources for Development Consulting found that Nigeria stood to lose out on nearly $6bn in projected revenues because of the unusual structure of the 2011 deal for one of Africa’s most lucrative remaining oil concessions. Campaign group Global Witness commissioned the consultants...The undeveloped deepwater plot, named OPL 245, is already at the heart of a corruption trial in Milan where prosecutors have alleged bribes of $1.1bn out of a $1.3bn deal were paid to public officials for the licence. The report raises questions about why Nigeria would have agreed to such a deal and will be seized on by anti-corruption campaigners, who allege officials for years conspired with multinational companies to plunder the country’s oil riches...Shell said it could not comment in detail about the report given the Milan trial but said the deal was a “fully legal transaction”, adding there was “no case against Shell or its former employees”. Eni said the analysis contained “incorrect technical and contractual assumptions” adding Nigeria has an option to take a share in the plot after costs have been recovered. It rejected any allegation of “impropriety or irregularity” in the deal...

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