An Italian trial which sees Anglo Dutch firm Shell and Italy’s Eni face corruption charges over a $1.3bn Nigerian oil deal should act as a wake-up call to the oil industry, campaigners have said.
The court case starting on Monday has been brought by Milan prosecutors and centres on alleged bribes paid by the oil companies to win a licence in 2011 for a highly-valued field off the west African coast.
Both companies strongly reject any wrongdoing.
The pair each own half of the rights to the OPL-245 field, which is estimated to contain a vast 9.3bn barrels of crude which has still not been produced.
The Italian case against the firms alleges that they secured the licence by channelling $1.1bn of a $1.3bn settlement to the Nigerian government to a company linked to former Nigerian oil minister, Dan Etete, depriving ordinary Nigerians of the money.
Etete, who was convicted in 2007 prior to the Shell/Eni deal of money laundering in a separate French case, is accused by prosecutors of spending $300m of the sum on real estate, aircraft, armoured cars. Etete denies the accusations.
Eni’s chief executive, Claudio Descalzi, is among the executives charged and due in court, along with Shell’s Malcolm Brinded, who was executive director of upstream international during the deal.
“This trial should be a wake-up call to the oil industry. Some of the most senior executives at two of the biggest companies in the world could face prison sentences for a deal that was struck under their watch,” said Barnaby Pace of campaign group Global Witness.
The court case is expected to last at least a year, as prosecutors question oil executives and take evidence on the alleged corruption and bribery involved in an extraordinary effort to win the licence.
According to court documents, that effort involved Shell hiring John Copleston, a former M16 employee who had contacts at the top levels of the Nigerian government, to work as a strategic investment adviser. Leaked Shell emails show the company was negotiating with Etete ahead of the deal, with Copleston writing in 2010: “Etete can smell the money.”
Shell said that no bribes or illegal payments were made with its knowledge, and there was no place for bribery in the company. It added there were no “quid pro quo” arrangements with any government officials.
“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,” a spokesperson said.
Eni said its own independent investigations of the claims had concluded there was nothing irregular about the deal.
A spokesperson said: “Eni expresses its full confidence in the judicial process and that the trial will ascertain and confirm the correctness and integrity of its conduct related to the acquisition of the OPL 245 operating licence.”
Nigeria’s financial watchdog, the Economic and Financial Crimes Commission (EFCC), is also investigating the case, and has a court hearing planned for June.