Graft probe team steps closer to court action

Italian law enforcement said to have furthered Shell and Eni allegations

Italian investigators have taken another step towards bringing big name oil executives and Nigerian officials to trial over a long-running graft scandal involving the award of a prized deep-water oil block in the Niger Delta to a little-known indigenous player, and later to Eni and Shell.

International campaign organisation Global Witness (GW) reported that sources close to Italian law enforcement had confirmed a request that Shell, Eni and several Eni executives, including chief executive Claudio Descalzi, be sent to trial for alleged corruption offences related to the acquisition in 2011 of OPL 245.

Separate charges would be laid against four senior Shell executives, including current Shell Foundation chair Malcolm Brinded, who served as the supermajor’s head of Global E&P at the time of the events.

In 2011, Shell and Eni paid $1.1 billion to Malabu Oil & Gas, which GW contends was a front company for former minister of petroleum resources Chief Dan Etete, with involvement by former Nigerian head of state president Goodluck Jonathan, who is alleged to have received $500 million.

OPL 245 was initially awarded to Malabu in 1998 on a sole risk basis.

Both oil companies have consistently denied that they had any idea this money would end up with Malabu because they paid funds into an escrow account in good faith.

Jonathan also dismisses the allegations, insisting that he has never used fronts “to seek favour or collect gratification from any party on his behalf”.

GW campaigner Simon Taylor hailed the decision by Italian law enforcers as demonstrating that major international companies and their senior executives are not above the law, urging others to “wake up to the new reality where corrupt deals and actions that lead to them cannot stay hidden behind closed doors — a new age of accountability is dawning”.

Fellow Italy-based rights campaigner Re:Common activist Antonio Tricario demanded that “the Italian state and Eni shareholders ask if the Eni management has been asleep at the wheel over corporate governance” and he questioned whether the board should be re-appointed in April while allegations of serious criminality hang over senior executives.

UK financial governance watchdog Corner House also noted efforts made by Nigerian anti-corruption agents in seeking “charges of conspiracy, bribery, corruption and money-laundering” against Shell and Eni subsidiaries.

Nigeria’s Economic & Financial Crimes Commission stepped forward in January, pending the prosecution of parties accused, prompting Etete to make public statements that would appear to contradict the narrative found elsewhere in the media.

Etete said that since the federal government of Nigeria made no investment in Malabu, it cannot expect to benefit from proceeds accruing from the settlement of current disputes, nor should it be assumed that monies paid into an escrow account will end up in state coffers.

Etete told local media that Malabu had done nothing wrong and had been in compliance with the same laws to which other successful awardees were subject to at that time.

“For the avoidance of doubt, the government received its own share of $210 million as a signature bonus pursuant to instructions that flowed from the escrow agreement and by the escrow agent,” Etete said.

Shell has always argued that it is co-operating with the authorities to demonstrate there is no reason to impute malfeasance, while Eni issued a statement denying any corporate wrongdoing,

An Eni spokesman said this week: “Based on our review of the prosecutor’s file and our understanding of the facts, we don’t believe a request for indictment is justified and we are confident that this will be determined in the next stages of the proceedings.”

An Eni spokesman said the company has received a “notice of request for indictment from the Milan Prosecutor.”

He said a judge will now schedule preliminary hearings and “will decide if there is enough evidence to proceed with the full trial which would not start until early 2018,” if one happens at all.