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$1.1bn claim against Shell and Eni could be the largest payment in oil sector corruption
The Nigerian government’s decision to formally launch a $1.1bn claim against Shell and Eni in UK courts, relating to funds allegedly misappropriated for bribes and kickbacks during the acquisition of an oil block in 2011, could lead to the largest-ever payment in an oil sector corruption case. If successful, the case, launched in November 2018, could also open the door for more scrutiny by governments of deals made by their predecessors in the hope of winning similar awards
The two firms have received harsh criticism from an Italian judge and now await UK court proceedings.
According to the Economist, Eni and Shell deny any wrongdoing related to the deal. The legal case centres on the acquisition in 2011 of offshore block OPL 245-which could hold up to 9bn barrels of oil. Most of the $1.3bn believed to have been paid.
Lawyers for the Nigerian government said they had filed a $1.1 billion lawsuit against Royal Dutch Shell and Eni in a commercial court in London in relation to a 2011 oilfield deal.
The OPL 245 oilfield is also at the heart of an ongoing corruption trial in Milan in which former and current Shell and Eni officials are on the bench. “It is alleged that purchase monies purportedly paid to the Federal Republic of Nigeria were in fact immediately paid through to a company controlled by Dan Etete, formerly the Nigerian minister of petroleum, and used for, amongst other things, bribes and kickbacks,” the statement said.
The two oil majors are embroiled in a long-running corruption case revolving around the purchase of Oil Prospecting Licence 245.
OPL 245, which is one of the biggest sources of untapped oil reserves on the African continent with reserves estimated at nine billion barrels, is also at the heart of an ongoing corruption trial in Milan, Italy, in which former and current Shell and Eni officials are on the bench.
Milan prosecutors alleged bribes totalling around $1.1bn were paid to win the licence to explore the field which, because of disputes, had never entered into production.
The new London case also related to payments made by the companies to get the OPL 245 oilfield licence in 2011.
“It is alleged that purchase monies purportedly paid to the Federal Republic of Nigeria were in fact immediately paid through a company controlled by Dan Etete, formerly the Nigerian Minister of Petroleum, and used for, among other things, bribes and kickbacks”.
“Accordingly, it is alleged that Shell and Eni engaged in bribery and unlawful conspiracy to harm the Federal Republic of Nigeria and that they dishonestly assisted corrupt Nigerian government officials.”
The Nigerian government also included Nigeria-based Malabu Oil & Gas in the lawsuit, and a company called Energy Venture Partners Ltd., according to Bloomberg.
Malabu was allegedly controlled by Etete, who took possession of the $1.1bn payment and used it for bribes and kickbacks, according to the lawsuit.
Antonio Secci, a lawyer for Etete, was quoted as saying that the London suit “surprises” because the Nigerian government is already seeking damages in Milan.
“This situation cannot be represented again in London because it is repetitive,” he said.
Shell said “the 2011 settlement of long-standing legal disputes related to OPL 245 was a fully legal transaction with Eni and the Federal Government of Nigeria, represented by the most senior officials of the relevant ministries.”
Eni was quoted as saying in an emailed statement that it rejected “any allegation of impropriety or irregularity in connection with this transaction.”
“Eni (…) signed a commercial agreement in 2011 for a new licence for OPL 245 with the Federal Government of Nigeria and the Nigerian National Petroleum Corporation and the consideration for the licence was paid directly to the Nigerian government,” it said.