TWO anti-corruption charities, Finance Uncovered and Global Witness, have published what they claim is evidence proving that Shell knowingly took part in a bribery scheme to acquire a valuable offshore oil block in Nigeria.
In 2011 Shell, along with Italian oil firm Eni, paid US$1.3bn to the Nigerian government for the block, Oil Prospecting Licence (OPL) 245, thought to contain 9bn bbl. However, rather than staying with the government, all but a fraction of the money (a US$210m so-called signature bonus) ended up going to a company called Malabu Oil And Gas, owned by the then Nigerian oil minister Dan Etete. Finance Uncovered and Global Witness say in their report that Etete used this money to pay political bribes. He had awarded Malabu, which he owned “secretly”, ownership of the field.
Both companies have consistently denied knowing that the money would be used for bribes to settle disputes, but the report, Shell knew, alleges that senior Shell executives were briefed on how the money would be used. The report includes details of leaked emails, including one which stated: “The [Nigerian] president is motivated to see 245 closed quickly – driven by expectations about the proceeds that Malabu will receive and political contributions that will flow as a consequence.”
An email from Shell strategic investment advisor John Copleston, describes a discussion with “Mrs E”. The email, published as a screenshot, says: “She says E [thought to be Etete] claims he will only get 300m we offering [sic] – rest goes in paying people off.”
Copleston also apparently emailed Shell’s then-CEO Peter Voser in March 2010, saying: “Etete can smell the money. If, at 70 years old, he does turn his nose up at 1.2 bill he is completely certifiable and we should then probably just hold out until nature takes its course with him.” This, according to the report, shows that Shell knew, at the highest levels, what would happen to the money.
Shell and Eni are already being investigated over the matter. In February 2016, Italian and Dutch prosecutors began a formal investigation into the activities of Shell in acquiring OPL 245, having already begun an investigation into Eni officials in 2014. Investigators in the Netherlands raided Shell’s offices in The Hague in February 2016. In February 2017, media reports said that the Italian prosecutors were seeking a trial for Eni CEO Claudio Descalzi, its former CEO Paolo Scaroni, businessman Luigi Bisignani, Eni itself and Shell, along with several other individuals. A corruption trial is also expected to begin shortly in Nigeria against Shell’s Nigerian subsidiary Shell Nigeria Exploration Production Company (SNEPCo), Eni and its Nigerian subsidiary Nigerian Agip Exploration, along with Etete and former Nigerian justice minister Mohammed Adoke.
A Shell spokesperson told The Chemical Engineer that it would not comment on the specifics as the matter is under investigation, but added: “Based on our review of the Prosecutor of Milan's file and all of the information and facts available to Shell, we do not believe that there is a basis to prosecute Shell. Furthermore, we are not aware of any evidence to support a case against any former or current Shell employee. If the evidence ultimately proves that improper payments were made by Malabu or others to then current government officials in exchange for improper conduct relating to the 2011 settlement of the long-standing legal disputes, it is Shell’s position that none of those payments were made with its knowledge, authorisation or on its behalf.”
Eni told Global Witness that there were “inaccurate statements and mischaracterisations of the record” made in the report and said that it would not argue the merits of a case under investigation.
An Eni spokesperson told The Chemical Engineer: “Neither Eni nor Shell paid any monies other than as contemplated and recorded by the Block Resolution Agreement and did not pay Malabu, to Chief Dan Etete or to any public officer.
We take strong exception to these assertions (with reference to the allegations in respect of the payment made by Eni and Shell to the government of Nigeria) as they are neither supported by the facts, the underlying agreements or the independent investigations conducted to date and therefore must be dismissed for lack of substance and merit. We continue to underscore the fact that Eni and its personnel have not been involved in any wrongdoing.”
It is not the first time Shell has been linked with corruption in Nigeria. In October 2010, SNEPCo admitted paying bribes of US$2m to subcontractors in Nigeria. The US Department of Justice fined it $30m, while parent company Shell paid US$18.1m in civil penalties.
“Shell and its oil industry peers can no longer masquerade as global leaders for sustainability, good practice and the protection of human rights, while entering into dodgy deals and lobbying to weaken transparency and accountability laws. Oil companies, their investors and governments should publicly support strong, project-by-project disclosure requirements through legally binding rules, including in the US,” the report says, concluding: “These new developments in the OPL 245 scandal show clearly why robust payment transparency requirements must be established and maintained.”
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