Shell, Eni face bribery trial in Milan today

In the city of Milan, an Italian court is set to resume corruption trial against executives of oil giants (ENI and Shell) and Nigeria’s ex-oil minister Dan Etete in what seems to be the biggest corruption cases faced by the oil industry in recent years.

The case, which has been repeatedly delayed, involves the 2011 purchase by Shell and Eni of Nigeria’s OPL 245 offshore oilfield, one of Africa’s most valuable oil blocks.

Prosecutors in Milan have alleged that $520 million from the deal was converted into cash and intended to be paid to the then Nigerian President Goodluck Jonathan, members of the government and other Nigerian government officials. They also claimed $50 million in cash was also delivered to the home of Eni executive Roberto Casula.

Eni’s current CEO Claudio Descalzi, former CEO Paolo Scaroni, and Chief Operations and Technology Officer Roberto Casula are standing trial alongside four former Royal Dutch Shell staff members including former executive director for Shell’s Upstream International operations Malcolm Brinded and two former MI6 agents Guy Colegate, a business adviser; and John Copleston, a strategic investment adviser employed by Shell of having paid millions of dollars in bribes in order to acquire a lucrative oil exploration and drilling license in Nigeria.

For years, Shell had claimed that it only paid the Nigerian Government for the OPL 245 oil block. But after the joint investigations of Global Witness and UK investigative journalism group Finance Uncovered, Shell confessed it had dealt with convicted money launderer and former oil minister Dan Etete. Etete had awarded the OPL 245 oil block to his secretly owned company, Malabu, while serving as Oil Minister.

The trial was originally scheduled for March 2018 but was postponed to May 2018 started in 2011 when Shell and Eni reportedly transferred $1.3 billion into a Nigerian government bank account. The two companies wanted to secure the rights to an oil field called OPL245, which according to estimates by the oil companies was worth $3 billion. However, the majority of the payments did not end up in the Nigerian treasury but went to a company called Malabu Oil & Gas, which was controlled by then oil minister Etete.

The accusations are that $520 million of the purchase price was converted into cash and paid to politicians as bribes. Former Nigerian President Goodluck Jonathan also alleged to have profited from the cash. Only $210 million are said to have reached Nigeria’s treasury.

The Nigerian government already declared in a lawsuit in England that the 2011 purchase of the production license for the huge oil field was unlawful.

Shell, Eni and their executives have denied all charges however Dan Etete, the man behind Malabu Oil and Gas saga, was oil minister under Nigeria’s former dictator Sani Abacha in the 1990s. In this role, he allegedly acquired the oil mining license for OPL245 in 1998 and transferred it to his company. In 2007, Etete was convicted of illegal financial transactions in France. Though he is also supposed to stand trial in Milan, HEDA’s spokesperson, Lanre Suraju, stated that Etete has disappeared.

Milan is not the only place where court proceedings are taking place, also an environmental right group, Human and Environmental Development Agenda (HEDA) is asking a federal high court in Lagos  to withdraw the operational licence of  Shell and ENI.

The second trial for the oil giants is the Federal Court of Justice in Lagos, where environmental right group, Human and Environmental Development Agenda (HEDA) is challenging the oil companies. HEDA wants Shell and Eni to lose their licenses for oil production in Nigeria, Africa’s largest crude oil producer.

HEDA wants the trial to put more pressure on the Nigerian government to take action against the accused oil companies.

The case is also been investigated by public prosecutors in United States and Netherlands.

​F​or Nigeria’s oil wealth to ​benefit  all Nigerians​ with developmental infrastructures​, oil experts are of the opinion that corruption cases like the Malabo deal are the major impediment to Africa’s largest economy development.

Both Shell and Eni have repeatedly denied wrongdoing, In a statement, Shell said: “We believe the trial judges will conclude that there is no case against Shell or its former employees. There is no place for bribery or corruption in our company.”

On its website, Eni said: “Eni’s Board of Directors has reaffirmed its confidence that the company was not involved in alleged corrupt activities in relation to the transaction.The board of directors also confirmed its full confidence that chief executive Claudio Descalzi was not involved in the alleged illegal conduct and, more broadly, in his role as head of the company.”

The case is likely to shed some light on the murky dealings of international oil companies to access resources, including paying governments large sums of money in exchange of securing licensing rights.

Barnaby Pace from Non-Governmental Organisation (NGO) Global Witness said the trial could be “a turning point” for the oil industry.

“Some of the most senior executives of two of the biggest companies in the world could face prison sentences for a deal struck under their watch,” Pace added.

 The case also highlights the role played by London in facilitating the transfer of money from oil companies to government officials.

Earlier this year, a special investigation by DeSmog UK revealed how small oil and gas companies are using London’s junior stock market, the Alternative Investment Market (AIM), to finance sometimes unsavoury business activities in frontier markets across Africa.

DeSmog UK’s Empire Oil investigation used the example of Sirius Petroleum, a small oil investment company listed on AIM and operating in the Niger Delta to shed some light on the exchange’s regulatory flaws and the City’s enabling role.

Talking about the Shell and Eni trial, Chairman of Nigerian NGO Human and Environmental Development Agenda, Lanre Suraju, said: “It is a clear signal that it is no longer business as usual for oil companies in Nigeria. It’s time justice was served.”

“This case heralds the dawning of the age of accountability, a world where even the most powerful corporations can no longer hide their wrongdoing and avoid justice,” said Antonio Tricarico, from Italian anti-corruption NGO, COMMON.