A Nigerian oil deal that saw a $1.1bn payment from Shell and Eni passed on to a company controlled by a former oil minister “could fall foul of anti-corruption legislation”, according to transparency campaigners.
The multinationals paid the money in April 2011 to Nigeria’s government for a deepwater concession holding up to nine billion barrels of oil.
The government then transferred the exact proceeds, $1,092,040,000, to Malabu Oil & Gas, which had been locked in a dispute with Shell for ownership of the concession, called block OPL 245.
Malabu is controlled by Dan Etete, who was oil minister under the late dictator Sani Abacha, and who was convicted of money laundering in France in 2007.
Details of the transactions only emerged this year in New York, where Mr Etete is being sued for a $66m commission by a Russian consultant who says he brokered the deal.
Shell and Eni say they only paid the Nigerian authorities and were not involved in the government’s simultaneous settlement with Malabu. But campaign group Global Witness says evidence suggests the multinationals knew the $1.1bn would flow to the Nigerian company, which was awarded the block under Mr Abacha in 1998 but later saw it given to Shell, prompting a long legal battle.
Responding to a parliamentary hearing into the deal, Nigeria’s attorney-general, Mohammed Adoke, wrote in July that Shell and Eni “agreed to pay Malabu through the federal government acting as an obligor”. The Russian consultant, Ednan Agaev, echoed this in an affidavit to the New York Supreme Court.
He described meeting Shell and Eni representatives on several occasions, and proposing a deal to Mr Etete in December 2010 that would see the multinationals’ payment for control of OPL 245 passed to Malabu through the government.
A month later, Shell and Eni came back with a “similar” proposal, Mr Agaev said, and “despite the new form of the transaction, the substance of the final outcome was the same, as Malabu was to receive $1.1bn . . . At the end of March 2011, I met with Etete, he accepted the proposal, and I conveyed his acceptance to Eni Agip/Shell.”
Global Witness says that if the multinationals knew the money would be paid to Malabu, the deal could test anti-corruption laws in the UK, US and Italy, “for the reason that a substantial monetary ‘reward’ ended up being paid to a company controlled by an individual, who had arguably abused his public position to obtain OPL 245 in opaque circumstances during the Abacha dictatorship”.
The deal illustrates why proposed new EU transparency laws must require extractive industry companies to report payments to governments on a project-by-project basis, according to Simon Taylor, director of Global Witness. Details of the OPL 245 settlement would not have been made public were it not for the New York case.
Eni said in a statement: “Eni or any of its affiliates have not entered into a memorandum of understanding with Malabu Oil & Gas in respect of the block 245.”
It added: “Payments have been made to the federal government . . . in a transparent manner”, and said Eni “was not part of” any earlier dispute about the block.
Shell said it had acted “at all times in accordance with both Nigerian law and the terms of the OPL resolution agreement”.
“We are open and transparent about all payments to [the federal government of Nigeria],” the company said. “In resolving this long-running issue, Shell has not acted in any way that is outside normal global industry practice.”
It added: “Inspection of Malabu’s company records as part of due diligence did not establish any connection between Dan Etete and Malabu.”
Neither Mr Etete nor any other Malabu representative could be reached at the company’s registered address in Lagos.
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