(5 minutes read)
· An Italian court acquitted energy groups Eni and Shell of US$1.1-billion corruption charges related to an oil exploration deal in Nigeria
· It was touted as the biggest corruption scandal in the industry till date and has been widely discussed in the hydrocarbon sector
· The allegation of the Nigerian government was that the companies paid bribes to secure the field
· They paid US$1.3 billion dollars for a license on OPL 245 to buy the oilfield
An Italian court acquitted energy groups Eni and Shell of US$1.1-billion corruption charges related to an oil exploration deal in Nigeria. It was touted as the biggest corruption scandal in the industry till date and has been widely discussed in the hydrocarbon sector.
In 2011 Eni and Shell purchased a giant offshore oilfield in Nigeria, which could hold nine billion barrels of crude. The allegation of the Nigerian government was that the companies paid bribes to secure the field. They paid US$1.3 billion dollars for a license on OPL 245 to buy the oilfield. The said oil field was owned by Dan Etete, former Nigerian Oil Minister, The Government prosecutors claimed that US$1.1 billion of the purchase price were bribes that went to middlemen and politicians, including then oil minister Etete and did not come into the hands of the government.
The money was paid into a Nigerian government bank account in London. But prosecutors argue that that US$1.1 billion ended up in the pockets of Nigerian politicians and middlemen. But judges in Milan cleared Eni, Shell and 13 defendants, including Eni’s CEO Claudio Descalzi and his predecessor Paolo Scaroni of the crime. Prosecutors called for the managers to be jailed and the companies to be fined, as well as confiscating US$1.1 billion from the defendants.
The ruling came after 74 hearings spread over three years. Nigeria’s government, dissatisfied with the Italian court’s verdict, is reviewing the order and would soon decide whether to appeal to a higher court. The Nigerian government sources asserted that it would continue to hold those responsible for perpetrating the fraud.
While denying the charges, representatives of both companies said that the verdict vindicated their transparent stand. The companies also maintain that the Nigerian government never gave them production rights to start extracting oil. Therefore, the benefits never materialized and both companies have invested US$2.5 billion and their license would expire in May this year.
