Eni, Shell knew of ‘sharks’ in Nigeria graft case: judge

An Italian judge said on Monday oil majors Eni (ENI.MI) and Royal Dutch Shell (RDSa.L) were fully aware their 2011 purchase of a Nigerian oilfield would result in corrupt payments to Nigerian politicians and officials.

Italy’s Eni and Shell bought the OPL 245 offshore field for about $1.3 billion in a deal that spawned one of the industry’s largest corruption scandals. It is alleged that about $1.1 billion of the total was siphoned to agents and middlemen.

The Milan judge made the comment in her written reasons for the September conviction of Nigerian Emeka Obi and Italian Gianluca Di Nardo, both middlemen in the OPL 245 deal, for corruption. The pair were jailed for four years.

“The management of oil companies Eni and Shell … were fully aware of the fact that part of the $1.092 billion paid would have been used to compensate Nigerian public officials who had a role in this matter and who were circling their prey like hungry sharks,” judge Giusy Barbara said in her reasoning.

“It was not mere connivance, but a conscious adhesion to a predatory project damaging the Nigerian state,” she added.

She also said money was given to some managers of state-controlled Eni, the biggest foreign energy company in Africa.

“Things look even more serious from an Italian point of view with the involvement of the country’s leading company, in which the Italian state is the biggest shareholder, with obvious reputational damage for the whole Italian community,” she said.

Obi and Di Nardo have been tried separately from Eni and Shell, which also face corruption allegations over the same deal in a hearing that is expected to drag on for months.

Eni said it would analyze the judge’s remarks, noting that a fuller account of the facts and evidence surrounding the deal would emerge only from the main trial.

The Italian company has previously denied any wrongdoing.

At 1538 GMT, Eni shares were down 1.8 percent while Shell shares were 1.1 percent lower.

Under the deal, Eni and Shell jointly acquired the OPL 245 field from a company owned by former Nigerian oil minister Dan Etete, who was convicted of money laundering in an unrelated case in France in 2007.

Shell said on Monday that neither Obi nor Di Nardo had worked for Shell, and that there was no basis to convict it or any of its former staff of alleged offences related to the deal. Malaysia hits Goldman Sachs with criminal charges

In her reasonings, the judge said two banks – Switzerland’s BSI and Lebanon’s Misr – had sent money transferred to them in the deal back for compliance reasons due to Etete’s reputation.

Eni Chief Executive Claudio Descalzi and four ex-Shell managers, including former Shell head of upstream Malcolm Brinded, are also accused of international corruption in the main trial. They have all denied any wrongdoing.

Brinded’s lawyer referred requests for comment to Shell.

Judge Barbara alleged that Shell executives, including Brinded, had known that Etete would keep part of the purchase price for himself and use the rest to “pay people”, including Nigerian politicians and public officials who had helped him to take possession of the field in 1998.