Shell and Eni Paid $1.1bn ‘behind closed door’ to acquire Oil exploration rights in Nigeria, says Global Witness

oilpic4Oil majors Shell and Eni paid US$1.1bn to an Illegal company and secured exploration and production rights for one of West Africa’s largest oil fields, situated off the coast of Nigeria, Global witness has said.

The company called Malabu Oil and Gas, was by the time of payment in 2011 secretly owned by the former oil minister in Nigeria, who had granted his company rights to the oil field in 1998.

The two companies according to the watchdog group entered the deal for a “massive state asset” behind closed doors, without the knowledge of the public.

“The payment was equivalent to two thirds of Nigeria’s health budget, but the money did not benefit the country’s citizens” reads part of the report.

However, Shell and Eni denied paying anyone other than the Nigerian government. Global witness has said the companies were well aware and  there is clear evidence that they knew their payment would be diverted into private pockets.

“By doing business with corrupt politicians, Shell and Eni exposed their shareholders to enormous risk” the group said.

“The case is currently under investigation by authorities in the UK, Italy and Nigeria and there is a real chance the companies will lose their rights to the block, which is a critical plank in their strategy to replenish their reserves,” they added.

According to global witness, a hearing in London this month will determine whether some of the funds related to the deal will be unfrozen at the request of Malabu. The group says the case will also test the competence of UK Courts in dealing of high graft cases of its companies around the world.

“This will test to the UK courts’ willingness to stand firm on preventing dirty money being laundered through the UK.  It will also be an opportunity for the new reform-minded government of Nigeria to deal with a legacy of corruption from previous administrations,”

In September 2015, Global witness questioned the UK based Serious Fraud Office (SFO) for neglecting a case in which its native Company Socco International was involved in making dubious payments to “a corrupt and dangerous army official” in Democratic Republic of Congo to explore Oil in Virunga National Park.

Also see: Global Witness questions UK Serious Fraud Office for neglecting Oil firm Case in DR Congo 

 

 

Leave a Reply

Your email address will not be published.