UPDATED: OPL 245: Italian court orders Shell, Eni to stand trial

An Italian judge yesterday ordered Royal Dutch Shell and Eni to stand trial over alleged corruption in Nigeria involving the award of OPL 245 seven years ago.

In 2011 Shell and Italian oil giant Eni paid $1.1 billion for OPL 245, an oil block  located on the southern edge of the Niger Delta allegedly knowing that the money would go to a front company secretly owned by a former Nigerian oil minister, Dan Etete, who had been convicted for money-laundering.

 

Etete was accused of awarding himself the block while in office under the former military dictator Sani Abacha, through Malabu Oil and Gas, a company he owned.

 

Besides the two companies, 13 people including Eni CEO Claudio Descalzi and former chairman of the Shell Foundation Malcolm Brinded were put on trial, the sources tell Reuters.

Under Italian law a company can be held responsible if it is deemed to have failed to prevent, or attempt to prevent, a crime by an employee that benefited the company.

In a reaction to the Shell said, “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.”

Eni reiterated that the company and its CEO had not been involved in any wrongdoing. It said the board had full confidence in Descalzi who at the time of the deal was head of exploration and production.

The trial is due to start on March 5, the sources said

In April, Global Witness and Finance Uncovered revealed that Shell executives knew that $1.1bn they paid for OPL 245 would go to Dan Etete and were likely to be used in a vast bribery scheme. For years, Shell has claimed that it only paid the Nigerian Government.

 

But after Global Witness investigations Shell shifted this position and acknowledged it had dealt with Etete, through his front company Malabu. Dan Etete was convicted of money laundering in France in 2007. Etete had awarded his own company the OPL 245 oil block while oil minister during the rule of former dictator Sani Abacha.

 

In December, the Milan Public Prosecutor alleged that $520 million from the deal was converted into cash and intended to be paid to the former president Goodluck Jonathan, members of the government and other Nigerian government officials.

 

OPL 245 holds significant discovered hydrocarbon reserves and will increase Shell’s reserves by a third. Two oil and gas discoveries have been made on the block. Etan and Zabazaba were discovered in 2005 and 2006 respectively. Eni plans to develop the Etan and Zabazaba fields in phases with subsea wells tied back to a leased floating production storage and offloading (FPSO) vessel