- Trump renews attack on OPEC over high oil price
Ejiofor Alike with agency report
Italy’s Supreme Court threw out an appeal from Shell and four former Shell managers to stop a trial on alleged corruption in Nigeria, which also sees Eni’s chief facing charges, legal sources said Wednesday.
The court’s decision coincided with a complaint by US President Donald Trump on rising price of oil, blaming the Organisation of Petroleum Exporting Countries (OPEC) for the hike.
The long-running graft case revolves around the 2011 purchase by Eni and Shell of Nigeria’s Oil Prospecting Lease (OPL) 245, and offshore oil field, from Malabu Oil and Gas Limited for about $1.3 billion.
The trial kicked off last month, with the next hearing set for June 20.
Shell and Eni’s appeal was aimed at reversing the trial to the preliminary hearing stage as a result of what it said were procedural errors, but the court decided the appeal was inadmissible.
The former Shell executives involved in the case had claimed a procedural error was made when the original ruling to send the case to court was taken and had applied to Italy’s Supreme Court to void it.
The Supreme Court had fixed June 12 to deliver judgment on the appeal.
Nine current and former executives or contractors, including Eni Chief Executive, Claudio Descalzi, have been accused by Italian prosecutors of paying bribes to secure the licence to explore OPL 245, which holds an estimated nine billion barrels of oil but has never entered production.
All the accused, including Shell and Eni deny wrongdoing.
Reuters quoted a Shell spokeswoman as saying: “Based on our review of the Prosecutor of Milan’s file and all of the information and facts available to us, we do not believe that there is a basis to convict Shell or any of its former employees.”
The trial of top executives from oil majors Eni and Shell over alleged corruption in Nigeria, which kicked off last month with a brief procedural hearing, was re-adjourned till June 20.
At the next hearing, the Milan court said it would assess requests from third parties, including a series of international non-profit organisations, to join the case.
At last month’s hearing, a lawyer representing the Nigerian government, Domenico Cartoni Schittar, said he was stepping down from his role.
In his comments in a signed document seen by Reuters, Cartoni Schittar said he had given up on a mandate, which he said had become “awkward.”
Global Witness, a campaign group that has conducted its own investigations, has described the case as one of the biggest corruption scandals in the history of the oil industry.
Descalzi and former Shell Foundation Chairman Malcolm Brinded are standing trial along with 11 other defendants and the two companies.
In another development, President Trump Wednesday said oil prices were too high and blamed OPEC, renewing his attack even as prices fell Wednesday, amid expectation that the group may relax its output cuts later this month.
Oil prices have risen by around 60 per cent over the last year after OPEC and some non-OPEC producers, including Russia, started withholding output in the international market in 2017, to reduce excess supply.
Some countries have already increased production, and analysts have said the outlook for the oil market for the rest of 2018 is uncertain, as OPEC members prepare to meet June 22-23 in Vienna to discuss output.
Reuters reported that in the United States, rising petrol prices have threatened to blunt other economic headwinds.
According to the report, prices nationwide have edged up toward $3 per gallon as the United States hits its peak summer travel season, still less than the $4 a gallon in 2008 during the 2007-2009 Great Recession.
“Oil prices are too high; OPEC is at it again. Not good!” Trump wrote in a post on Twitter Wednesday, after last raising the issue in April.
THISDAY had reported that Trump had in April accused OPEC of “keeping oil prices artificially very high”.
In a tweet, Trump had said the cartel’s pricing cycle “will not be accepted” as there is no scarcity of oil supply to warrant such “high prices”.
“Looks like OPEC is at it again. With record amounts of oil all over the place, including the fully loaded ships at sea, oil prices are artificially Very High! No good and will not be accepted,” Trump reportedly tweeted.
But responding from Jeddah, Saudi Arabia, OPEC Secretary General Mohammad Barkindo had stated that the United States’ oil and gas industry was a beneficiary of the cartel’s efforts to restore stability in the oil market.
Barkindo said OPEC members were friends of the United States and had a vested interest in its growth and prosperity.
OPEC had on November 27, 2015 decided to pump as much oil as it could to the international market to defend its market share against US shale but the decision sent the price of oil to an all-time low of $27 per barrel in February 2016, as a result of excess inventory in the market.
With the drop in oil price, OPEC and other major producers, including Russia started to withhold 1.8 million barrels per day output in 2017 to rein in oversupply that had depressed prices since 2014 when the price peaked at $115 per barrel.
OPEC, together with Russia and a group of other producers, last November extended the output-cutting deal to cover all of 2018.