2nd October, 2014
On a day that Nigeria marked its 54th independence anniversary, Italian prosecutors were busy combing the books of state-backed firm Eni SpA over allegations that it bribed Nigerian officials an d politicians in the course of buying of a Nigerian oil block three years ago.
The prosecutors allege that at least half of the $1.1 billion paid was used to bribe local politicians, intermediaries and others, according to official documents and a person close to the investigation.
The Milan prosecutors have placed the Italian oil company, its former chief executive Paolo Scaroni and current CEO Claudio Descalzi under investigation for alleged international corruption surrounding the deal for the OPL 245 offshore oil field concession.
Eni and both managers, neither of whom have been charged, have denied any wrongdoing.
Calling on their UK counterpart to assist in freezing suspect assets, Italian prosecutors said in a letter to the UK’s Crown Prosecution Service (CPS) seen by Reuters that at least $533 million was paid to Nigerian officials and intermediaries who helped secure the sale.
The case has been a setback for the government of Prime Minister Matteo Renzi, because Italy’s 39-year old leader hand-picked company veteran Descalzi to run Eni as part of a recent management overhaul at the country’s state-controlled companies. Renzi has publicly supported Descalzi and said no conclusions should be drawn before the investigation is completed.
Eni and Royal Dutch Shell, which is not under investigation, bought the rights to the OPL 245 offshore oil licence block from the Nigerian government in 2011.
Production from the deepwater oil field is expected to begin in 2016 with the field estimated to hold up to 9.23 billion barrels of crude, equivalent to nearly a quarter of the country’s total proven reserves, according to industry figures.
An aide to Renzi told Reuters the case involving Eni, which is Italy’s biggest company by market capitalisation and the state’s biggest asset, was “not a big cause for concern at the moment.”
As part of their investigation, the Italian prosecutors in May asked the UK’s CPS to freeze $85 million in assets related to a Nigerian company, Malabu Oil & Gas, that prosecutors say was involved in the sale, according to a copy of the official request sent by the Milan investigators and seen by Reuters.
OWNERSHIP DISPUTE
The OPL 245 block licence has long been the subject of dispute. It was first awarded a decade ago by military dictator Sani Abacha to Malabu Oil & Gas for a publicly-stated $20 million.
After the death of Abacha, a new Nigerian government annulled the deal. Malabu’s licence was reinstated in 2006.
Reuters was not able to locate Malabu for comment, and it is unclear whether the company still exists.
Nigeria’s Economic and Financial Crimes Commission, a government agency, did not reply to questions sent by Reuters asking about the investigation by Italian prosecutors.
Shell, which is not under investigation in any case, released a statement saying: “Shell companies have acted at all times in accordance with both Nigerian law and the terms of the OPL 245 resolution agreement with.”
Reported by Reuters