Italian prosecutors are calling for lengthy jail terms to be handed down to the boss of Eni and one of Shell’s top former executives in a trial over alleged corruption in Nigeria.
They also are calling for the two oil companies to be fined €900,000 each and are seeking to confiscate almost $1.1 billion from all the defendants, who include Nigerian alleged middlemen.
The multi-year trial nearing conclusion in Milan focuses on a $1.3 billion deal in 2011 through which the companies secured joint ownership of OPL 245, a huge exploration block off the coast of Nigeria that is estimated to contain billions of barrels of oil.
Prosecutors allege that the companies knew that while the deal was officially with the Nigerian government, most of the purchase price would end up in corrupt payments to middlemen and politicians, including Dan Etete, the former oil minister.
They are seeking eight years in prison for Claudio Descalzi, 65, Eni’s chief executive, and 88 months for Malcolm Brinded, 67, the former Shell executive who ran its “upstream” exploration and production division at the time.
Shell and Eni both deny any wrongdoing, as do all the present and former executives on trial. They argue that it was a legitimate deal with the Nigerian government.
Royal Dutch Shell is Europe’s biggest oil company, with 80,000 employees and net profits of $15 billion last year. Eni reported adjusted net profits of €2.88 billion last year. The case has cast a shadow over both companies for several years, with litigation related to it being heard in multiple jurisdictions, including Nigeria.
In 1998, Mr Etete, 75, awarded the rights to OPL 245 to Malabu Oil & Gas, a company that subsequently he was shown to control. Shell bought an interest three years later, but became embroiled in legal disputes over its ownership, which the 2011 deal was designed to resolve by confirming Shell and Eni as joint owners.
Shell, which has its headquarters in the Netherlands, said in February last year that it had been informed that Dutch prosecutors were preparing to bring charges against it over the 2011 deal. In October last year the US Department of Justice closed its inquiry into the matter.
Shell warned in its annual report that there remained “a high degree of uncertainty around the OPL 245 matters and contingencies” and their effect on the company.
Mr Brinded retired from Shell in 2012, but has remained prominent in the energy sector, serving as president of the Energy Institute until last year. He said: “I have done nothing wrong and believe that will become clear in any legal proceedings. I stand by my view that there is absolutely no basis for the charges against me.”
The next hearings in the Milan trial are scheduled for September.
Eni said that the prosecutors’ request was “completely groundless” and it was “confident the truth will ultimately be established. Defence lawyers are going to show to the court that both Eni and its management’s conducts were correct in the OPL 245 transaction.”
Shell argues that the 2011 deal was a “a fully legal transaction with Eni and the federal government of Nigeria, represented by the most senior officials of the relevant ministries”. The company says that it does not believe “that there is a basis to convict Shell or any of its former employees in Milan” and that if evidence ultimately were to prove that improper payments had been made by Malabu or others, “none of those payments were made with its knowledge, authorisation or on its behalf”.
A spokesman added: “There is no place for bribery or corruption in our company.”
No present Shell executives are on trial in Milan, but the OPL 245 has caused them embarrassment. Dutch prosecutors who raided Shell’s offices in 2016 taped Ben van Buerden, 62, Shell’s chief executive, discussing the case with Simon Henry, the chief financial officer at the time. In the leaked recordings, the Shell boss referred to “really unhelpful emails” written by “the people we hired from MI6”.
Shell’s shares fell by 47¼p, or 3.6 per cent, to £12.62¾ yesterday.
– The Times.