Nigeria Orders Shell, Eni to Give Up Oil Block Amid Corruption Probe
January 27 2017 - 1:41PM
Dow Jones News
By Sarah Kent and Eric Sylvers
A Nigerian court has ordered Royal Dutch Shell PLC and Eni SpA
to give up control of a large offshore oil block amid an
investigation into their acquisition of the asset for over $1
billion, Nigerian authorities said.
The order is the latest development in a saga that has stretched
for years across courtrooms in the U.K., Italy and Nigeria in an
alleged corruption scandal involving the two oil giants and
Nigerian officials and businessmen.
Shell declined to comment. Eni said it was aware of reports
about the court order, but the company hadn't received notification
to relinquish control of the oil field. It denied any wrongdoing in
relation to the acquisition.
Italian prosecutors say in investigative records viewed by The
Wall Street Journal that Eni executives and Shell were allegedly
involved in a corrupt scheme to secure the oil block. No charges
have been filed.
Shell and Eni gained control of the block in 2011 after paying
$1.3 billion, capping off roughly a decadelong ownership dispute
between Nigeria's government, Shell and Malabu Oil and Gas, a
Nigerian company owned by a former oil minister, Dan Etete. Malabu
was assigned the block in the late 1990s when the country was under
military dictatorship.
Though the money Shell and Eni originally paid went to the
Nigerian government, much of it was later allegedly transferred to
Mr. Etete's company and used to pay kickbacks to executives and
Nigerian officials, according to an Italian investigation.
A lawyer for Mr. Etete wasn't immediately available to comment.
Italian prosecutors aren't investigating Malabu, according to
Italian court documents.
Nigeria's financial-crime investigators, the Economic and
Financial Crimes Commission, said the Nigerian Federal High Court
ordered Shell and Eni's oil license to be turned over to the
government "pending investigation and prosecution of suspects" in
the inquiry, which it referred to as the "Malabu Oil scam."
The commission sought Thursday's court order as part of its own
investigation, according to court documents. Shell and Eni's
Nigerian units could face charges of conspiracy, bribery, official
corruption and money laundering, according to the commissions'
affidavit.
Nigeria's state oil company Nigerian National Petroleum Corp.,
or NNPC, would be responsible for managing the oil license,
according to an oil ministry's spokesman. An NNPC spokesman said
the company hadn't yet been served with the ruling and would study
the necessary actions once it has been received.
Write to Sarah Kent at sarah.kent@wsj.com and Eric Sylvers at
eric.sylvers@wsj.com
(END) Dow Jones Newswires
January 27, 2017 14:26 ET (19:26 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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