Chloe Farand | June 18, 2018
One of the biggest corruption cases faced by the oil industry in recent years is due to resume in Milan on Wednesday as two of the world’s biggest oil companies Royal Dutch Shell and Italian firm Eni are facing trial.
Prosecutors are bringing criminal charges against Shell and Eni executives over allegations of corruption regarding a $1.3 billion oil deal in Nigeria.
This is the first time an oil company as large as Shell or senior executives of a major oil company have ever stood trial for bribery offences.
The case, which has been repeatedly delayed, involves the 2011 purchase by Shell and Eni of Nigeria’s OPL 245 offshore oilfield — one of Africa’s most valuable oil blocks.
Prosecutors in Milan have accused Shell and Eni of paying bribes to win the licence to explore the field which has never entered into production.
They allege that Shell and Eni paid $1.1 billion into an account for the Nigeria government of which $800 million was later transferred to Malabu Oil and Gas, a company secretly owned by former Nigerian petroleum minister and convicted money launderer Dan Etete, to be distributed as payoffs.
According to court documents seen by Reuters, the bank admitted it knew Etete would benefit from the $800 million payment. It also argued the UK’s Serious Organised Crime Agency (now the National Crime Agency) approved the payment.
JP Morgan denied negligence and previously said it “considers the allegations made in the claim to be unsubstantiated and without merit”.
Prosecutors in Milan have also alleged that $520 million from the deal was converted into cash and intended to be paid to the then Nigerian President Goodluck Jonathan, members of the government and other Nigerian government officials.
They claimed $50 million in cash was also delivered to the home of Eni executive Roberto Casula.
Charges have been brought against Eni’s chief executive Claudio Descalzi and former chief of exploration and production for Shell Malcolm Brinded. No current Shell officials are facing charges in the case.