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No time to roll back on transparency

New allegations of dirty dealings by  Shell in Nigeria once again shine the spotlight on oil companies doing business in countries with bad corruption records.

The email cache published by the Financial Times, BBC and others appears to show senior people at Shell were aware that much of the $1.3 billion paid for the OPL 245 offshore licence in 2011 would end up in the hands of private individuals rather than the Nigerian state.

The fresh information that has come into the public domain is largely historical, but Shell and its partner Eni of Italy are still waiting to hear whether they will face court action in Italy pertaining to this affair.

A Milan prosecutor has pressed charges against them, though Shell and Eni continue to assert they did nothing wrong in relation to OPL 245, one of Africa’s largest undeveloped oil blocks.

Both companies will no doubt be tried by the court of public opinion and probably found wanting. 

This is not a good thing when a wider PR battle needs to be fought over a role for oil and gas in a future low carbon world.

Nigeria is still synonymous in many people’s minds with corruption, coming in 136th place out of 176 countries on Transparency International's 2016 Corruption Perceptions Index.

Yet the Extractive Industries Transparency Initiative (EITI), which aims to ensure oil revenues are openly accounted for, argues Nigeria is making “meaningful” progress in cleaning up its act.

This will not wash with the public, which tends to damn big corporations for the very fact they are dealing in areas of the world infamous for wrongdoing.

Clearly the whole debate for Shell and Eni will become more tense should court proceedings start in Milan.

But in the absence of that, people will still wonder why Shell was hiring former MI6 employees, how so much money allegedly ended up in the hands of a Nigerian man - former oil minister Dan Etete - already wanted for corruption in France, and a host of other details.

Shell's current chief executive Ben van Beurden was not connected to the OPL 245 deal, but has been drawn into the scandal after wire taps suggested he may have known more than previously revealed.

The emails and other details of conversations emerge as questions are being asked about other oil-rich but notoriously tricky countries, such as Azerbaijan, which has quit the EITI after being accused of failing to meet its transparency commitments.

Equally Petrobras, Odebrecht and other top corporate names from the world of oil and offshore have been dragged into Brazil’s Car Wash corruption scandal.

Is this part of the supposed “oil curse”, or is some element of fraud inevitable wherever large amounts of money are swirling around in an otherwise struggling economy with relatively low levels of public accountability?

"Both companies will no doubt be tried by the court of public opinion and... found wanting.

It is unfortunate timing that US President Donald Trump has started to roll back the Cardin-Lugar law that requires US energy companies to provide details of all payments to foreign governments.

One can understand the need not to burden business with red tape, but strict governance could perhaps keep US companies cautious and possibly out of difficulties of the kind being experienced by Shell and Eni.