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Eni, Shell To Stand Trial Over Alleged Corruption In Nigeria


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An Italian judge ordered on Wednesday oil majors Eni and Shell, as well as Eni’s CEO Claudio Descalzi and other former and present managers at Eni and Shell, to stand trial over alleged $1.3-billion corruption in an acquisition of an oil block in Nigeria back in 2011.

Giusy Barbara, a preliminary hearing judge at a Milan court, set the trial to begin on March 5, 2018, in Milan.

In February this year, Italian prosecutors asked for Eni, Shell, Descalzi, and ten others to stand trial over charges of alleged international corruption over alleged payment of US$1.3 billion in bribes to the former Nigerian government in 2011, for which Eni and Shell allegedly secured exclusive rights to develop the oil block OPL-245 offshore Nigeria.

Today, Eni and Shell were ordered to stand trial under the Italian legislation that mandates companies be liable for crimes committed by directors and executives when a suspected unlawful conduct has benefited the legal entity.

The people who will stand are a dozen and include – apart from Eni’s current CEO Descalzi – his predecessor Paolo Scaroni, former Shell managers Malcolm Brinded, Peter Robinson, Guy Colgate, and John Coplestone, three former Eni managers – Roberto Casula, Vincenzo Armanna, and Ciro Antonio Pagano, as well as some alleged intermediaries – Luigi Bisignani, Gianfranco Falcioni, and Ednan Agaev.

Both Shell and Eni have always denied any wrongdoing, and issued statements following the judge’s ruling today.

“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 said, adding that “There is no place for bribery or corruption in our company.”

Eni, for its part, 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. Eni expresses its full confidence in the judicial process and that the trial will ascertain and confirm the correctness and integrity of its conduct,” the Italian company said.

Eni and Shell face trial in Italy over alleged Nigeria corruption

This material belongs to: Financial Times.

Charges relate to 2011 payments to secure prized offshore exploration and production block.

Eni and Royal Dutch Shell will face trial in Italy on corruption charges related to a $1.3bn deal involving one of Nigeria’s biggest untapped oilfields.

Claudio Descalzi, chief executive of Eni, is among several current and former executives charged, as well as the two companies.

The case relates to payments made by Eni and Shell in 2011 to secure a prized Nigerian offshore exploration and production block known as OPL-245.

An Italian prosecutor filed preliminary charges against the two companies and individuals including Mr Descalzi last February. A judge ruled on Wednesday that the case should go to trial, starting in Milan on March 5.

Eni and Shell deny wrongdoing and Eni said it had full confidence in Mr Descalzi.

The companies each own half of OPL-245, with Eni as operator. Their 2011 deal with the Nigerian government was intended to end years of wrangling over ownership between Shell and a Nigerian company linked to Dan Etete, the country’s former oil minister.

The deal is the focus of investigations in Nigeria and the Netherlands as well as Italy and has been alleged by anti-corruption campaigners to be an example of international oil companies conspiring with Nigerian rulers to plunder the country’s natural resources.

Simon Taylor, co-founder of Global Witness, the anti-corruption group, said: “The Nigerian people lost out on over $1bn, equivalent to the country’s entire health budget . . . They deserve to know the truth about what happened.”

A trove of internal Shell emails leaked to the FT and other news organisations in April revealed that the company cultivated Mr Etete with “lunch and lots of iced champagne”. The former oil minister could “smell the money” as Shell and Eni closed in on the deal, one email said.

Shell acknowledged in April that it knew Malabu, the company linked with Mr Etete, would be compensated for forfeiting its claim on OPL-245 but said that the transaction with the Nigerian government was “fully legal”. Mr Etete could not be reached for comment but he has previously denied wrongdoing.

Malcolm Brinded, former head of Shell’s international upstream business, and Peter Robinson, former head of operations in sub-Saharan Africa, are among four former Shell employees to be tried.

Shell said on Wednesday: “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 . . . There is no place for bribery or corruption in our company,” it added. Eni said its board of directors had “confidence that the company was not involved in alleged corrupt activities in relation to the transaction” based on the results of an independent investigation carried out for the company by a law firm.
The Eni board “confirmed its full confidence that chief executive Claudio Descalzi was not involved in the alleged illegal conduct”.

The trial, expected to last until at least 2019, threatens to cast a cloud over an otherwise positive outlook for Eni, which has emerged as one of the industry’s most prolific oil and gas explorers under Mr Descalzi’s leadership.

The company on Wednesday announced the start-up of its Zohr gasfield in the Egyptian eastern Mediterranean and last week increased its estimate for a big oil discovery off Mexico.