Italian oil and gas major Eni, the parent company of Nigeria Agip Oil Company, is being probed over suspected corruption linked to the acquisition of Oil Prospecting Licence (OPL) 245 in Nigeria for over a billion dollars.
A Milan prosecutor is probing the role of Claudio Descalzi, Eni’s chief executive officer (CEO), his predecessor and another Eni executives over their role in the Italian group’s acquisition, in partnership with Shell, of the rights to OPL 245.
The prosecutors recently opened a probe into alleged corruption relating to the acquisition of the offshore oil block in 2011 by Eni and Shell. Last year, British police began investigating a money-laundering allegation in connection with the same field.
Eni has however denied that there was illegal conduct on the acquisition of the oil block, highlighting that it entered into agreements for the acquisition of the block only with the government of Nigeria and Shell.
“The entire payment for the issuance of the license to Eni and Shell was made uniquely to the Nigerian government,” said Eni in a statement on Thursday.
The company notes that according to documents received on Wednesday as part of a foreign procedure ordering the seizure of a third party’s bank account, following a request by the Prosecutor of Milan, Eni’s chief executive officer and chief development, operations and technology officer are under preliminary investigation by the Milan prosecutor’s office.
“Eni is cooperating with the Milan prosecutor’s office, and is confident that the correctness of its actions will emerge during the course of the investigation,” Eni said.
When the block was acquired, the Nigerian government said it was helping to resolve an ownership dispute over the block between Shell and Malabu Oil and Gas.
Under the deal, Eni made a payment to the Nigerian government of $1.09 billion (€844,000) to secure joint ownership of the block along with Shell, which had previously taken a 40 percent stake and had begun to develop the field.
Most of the money Eni paid was subsequently passed on to Malabu Oil and Gas, a company believed to be owned by Dan Etete, a former Nigerian oil minister.
The block, which has been estimated to contain as much as nine billion barrels of crude oil, is considered the biggest and richest oil well in the country.
No sooner had word gone out that its CEO Claudio Descalzi was under investigation for alleged corruption in Nigeria, than Eni shares fell more than by one percent in early afternoon trading on Thursday, in an otherwise broadly flat market.
Descalzi, who was appointed CEO of Eni in May, is under investigation for his role in a $1.1 billion acquisition of the oil block. He was head of the group’s exploration and production (E&P) unit at the time of the deal.
No commercial agreement was reached by Eni with Malabu Oil and Gas that previously owned the block in question, according to Eni.
The company said its executives were being probed after a British court on Tuesday accepted the Milan prosecutor’s request to freeze two bank accounts.
According to Italian daily Corriere della Sera, these were Anglo-Swiss accounts containing a total of $190 million in the name of Emeka Obi, a suspected intermediary in the OPL 245 deal.
Corriere said the court had accepted the prosecutor’s argument that there was reason to believe the money may have been paid as part of an attempt to corrupt public officials.
Last year, Obi sued Malabu via Britain’s High Court and won an order that the company pay him $110 million in unpaid fees related to the deal which brought Eni into OPL 245.
Descalzi is suspected by prosecutors of playing a role in the corruption of Nigerian politicians and bureaucrats, Italian newspaper Corriere Della Sera reported on Thursday.
The OPL 245 deal has come under scrutiny in the Nigerian parliament for the role played by Dan Etete, a former oil minister. Etete was said to have awarded the rights to the block to Malabu Oil and Gas in 1998, at a time when he was close to Nigeria’s then-military dictator General Sani Abacha.
In February this year, the House of Representatives called for the outright cancellation of the award of OPL 245 to Shell and Agip for identified flaws in the resolution agreement among Malabu Oil and Gas, Shell and Agip with the federal government acting as obligor.
The legislators, in the report of the ad hoc committee that investigated OPL 245 Malabu deal, also directed the Economic and Financial Crimes Commission (EFCC) to prosecute all individuals and financial institutions linked with and found culpable of receiving and transferring unlawfully with respect to the deal.
Malabu Oil and Gas had sued the House of Representatives over its decision to cancel the sale of the OPL 245 oil block, asking the court to declare null and void, the resolution of the House on the oil block.
The Senate Committee on Petroleum Resources (Upstream) also summoned Mohammed Adoke, Attorney General of the Federation and Minister of Justice, and others allegedly involved in the deal to a meeting on January 29, 2014 over the issue but the minister did not attend.
He later reportedly informed the committee, through a letter personally signed by him and dated 27th February, that he stayed away because he had been earlier scheduled to attend a meeting in Addis Ababa, informing the committee to steer clear of the probe then because a group, African Youth Platform for Development, had instituted a suit in which the National Assembly and the Attorney-General were sued as first and second defendants.
Nigeria reportedly lost about $10 billion in revenue which should have accrued to the country from mergers and acquisitions (M&A) by international oil companies over 10 years ago.
A report of an investigation by the Committees on Justice and Finance of the House of Representatives revealed how oil companies manoeuvred their way and avoided payments of fees they were under obligation to pay and that Nigerian officials were willing collaborators as they failed to make demands from these companies monies due to the country.
Source : SunOnline