Global Witness, a global watchdog against natural resource-related conflict, corruption and associated environmental and human rights abuses said the S$1.1 billion paid by Shell and the Italian energy company, Eni for a Nigerian oil block “could fall foul of anti-corruption legislation and highlights the urgent need for strong disclosure laws across the European Union.
The global watchdog said in a statement posted on its website yesterday that a directive being discussed by the EU Council and Parliament must require full “project-by-project” disclosure to ensure such payments were publicly reported.
The payments made by Shell and Eni in 2011 relate to a disputed Nigerian oil block, Oil Prospecting Licence (OPL) 245.
Global Witness noted that though Shell and Eni paid the Federal Government, funds were then transferred shortly after to a company controlled by a former Minister of Petroleum, Mr. Dan Etete, who in 2007 was allegedly convicted in France of money laundering.
The global body quoted the Attorney General of the Federation and Minister of Justice, Mr. Mohammed Adoke, as saying that Shell and Eni were fully aware and in agreement that the money would then be transferred to Etete’s company, Malabu Oil and Gas.
“SNUD, a subsidiary of Shell and Eni agreed to pay Malabu through the Federal Government acting as an obligor the sum of $1, 092,040,000,” the minister was quoted as saying.
Malabu was said to have first obtained the oil block in 1998 when Etete was the Minister of Petroleum, under the late General Sani Abacha’s administration.
“If indeed, as Attorney General, Adoke, suggests, Shell and Eni knew that the ultimate destination of the funds would be Malabu and Etete, then this transaction might well fall foul of anti-bribery legislation in the United Kingdom, the United States 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’s dictatorship,” said Global Witness.
The body said it would be surprising if Etete’s history was not known to international companies like Shell, which had operated in Nigeria for more than 50 years.
Citing new information it had obtained, Global Witness stated that Shell and Eni were party to the negotiations that would ultimately involve the passing of payments on to Malabu.
According to the body, in a sworn affidavit given to a United States Court, a consultant central to the Malabu deal described a process of discussion and negotiation between the parties to the deal, which commenced approximately in May 2009.
Global Witness acknowledged that Shell responded to its detailed questions concerning the extent of their knowledge that funds paid would end up in Etete’s hands.
According to Global Witness, Shell disagreed with the “premise behind the various statements in Global Witness’ letter.”
Shell also suggested that it had appealed to the International Centre for Settlement of Investment Disputes in order to address what it claimed was its dispute with the Nigerian Government over OPL 245.
“No payments were made by either Nigerian Agip Exploration (NAE) or Shell Nigeria Exploration and Production Company (SNEPCo), respectively, Eni and Shell subsidiaries in Nigeria to Malabu Oil and Gas,” Shell said.
In its response to similar questions, Global Witness quoted Eni as saying that “The relevant agreements have been executed by Eni and Shell only with the Federal Government.”
Eni was also said to have claimed that the payments for the block were made to the Federal Government.
Global Witness however said both responses failed to address the key point that both companies were aware that the payment of funds to the Federal Government to acquire OPL 245 would ultimately be paid over to Malabu Oil and Gas.