• Thursday, May 23, 2024
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BusinessDay

US Lawmakers write Justice Department to re- investigate Nigeria’s $1.3 billion oil-field scandal

Eni and Shell

Two members of the United States Congress are urging the Department of Justice to reopen an investigation into oil giants Shell and Eni over allegations of corruption surrounding a 2011 deal for lucrative Nigerian oil bloc Oil Prospecting License (OPL) 245.

Their call comes after Nigeria’s President Bola Tinubu controversially restored the oil block’s ownership to the European firms.

In a letter dated May 8, 2024 to Attorney General Merrick Garland, Representatives Maxine Waters and Joyce Beatty alleged that Shell and Eni violated the Foreign Corrupt Practices Act (FCPA) by paying over $1.1 billion in bribes to Nigerian officials, including former President Goodluck Jonathan, to secure the OPL 245 oil rights.

“Available evidence implicates both companies in a scheme that resulted in the payment of $1.1 billion in bribes to Nigerian government officials,” stated the lawmakers from the financial services and national security committees.

They emphasised that U.S. law prohibits American firms from bribing foreign officials to benefit their business interests.

Shell and Eni, being registered with the SEC, “continue to profit from the deal in violation of the FCPA,” they added.

“Eni’s legal challenge, filed at the International Centre for Settlement of Investor Disputes (ICSID) and based upon the corruptly acquired prospecting license and related Resolution Agreement, as well as the use of the original contract in arbitration proceedings, constitutes further violation of the FCPA.

“The ICSID proceedings are currently suspended until May 23, 2024, with the agreement of the parties, suggesting that a settlement is being negotiated. Allegations have been made in the Nigerian press of further corruption relating to a settlement,” the lawmakers said.

“Shell and Eni, both registered with the U.S. Securities and Exchange Commission (SEC), continue to profit from the deal in violation of the FCPA.

“The reopening of this case would further illustrate the U.S.’ commitment to ‘aggressively pursue foreign bribery cases,’ as stated in the U.S. Strategy on Countering Corruption and reaffirm its pledge to fully implement the OECD Anti-Bribery Convention.

“We urge you to leverage this potent anti-corruption law to address the issues in this case and to send a powerful message that the United States stands vigilant in its pursuit of corporate crime around the globe,” they added.

OPL 245 is perhaps the most talked-about asset in Nigeria’s oil industry. It covers 1958 square kilometers and holds over nine billion barrels of crude oil, equivalent to nearly one-quarter of Nigeria’s total proven reserves.

The deal popularly called the Malabu scandal involved the alleged transfer of about $1.1 billion by Shell and ENI through the Nigerian government to accounts controlled by a former Nigerian petroleum minister, Dan Etete.

From accounts controlled by Etete, it was alleged that about half the money ($520 million) went to accounts of companies controlled by Aliyu Abubakar, popularly known in Nigeria as the owner of AA oil.

Anti-corruption investigators and activists suspect he fronted for top officials of the Goodluck Jonathan administration as well as officials of Shell and ENI.

The transaction was authorised in 2011 by Jonathan through some of his cabinet ministers and the money was payment for OPL 245, one of Nigeria’s richest oil blocks.

The oil resources of the OPL 245 license have remained undeveloped since the controversies began.