Royal Dutch Shell Plc and Eni SpA face additional corruption allegations over a Nigerian oil deal, after the West African country’s government said in a London lawsuit that it believes a handful of executives, including CEOs, were tied to more than $1 billion in bribery payments.
In court documents filed in early April, the Nigerian government said the oil companies’ senior managers agreed in 2011 to make a large payment for an offshore oil block, understanding the money would trickle down to government officials and senior executives from both companies. The filing singles out individuals who haven’t previously been caught up in the scandal, including former Shell Chief Executive Officer Peter Voser and Maarten Wetselaar, the current head of its large natural gas business.
The allegations are the latest bombshells in a years-old dispute over exploration rights to a tract in the Gulf of Guinea called Oil Prospecting License 245 that has spread to courtrooms throughout Europe. In addition to Shell and its partner, Eni, Nigeria separately sued JPMorgan Chase & Co. for transferring payments for the deal, while both oil companies and some executives face a criminal trial in Milan. Dutch prosecutors have have also told Shell they intend to file charges related to the 2011 deal, the company has said.
The acquisition of OPL 245 was “part of a fraudulent and corrupt scheme, that involved the payment of bribes,” the government said in a court filing. “The scheme also involved (or at least intended) the payment of bribes to Shell and/or Eni executives.”
A Shell spokeswoman said the transaction was “fully legal” and if improper payments were made, they were done without the knowledge of the company. An Eni spokeswoman said the London case is a “mere duplication” of a case related to the Milan trial, and the company denies any wrongdoing. Voser is currently interim CEO at ABB Ltd., which directed questions on OPL 245 to Shell. Shell declined to make Wetselaar available for an interview and commented on his behalf.
The Nigerian government is seeking more than $1 billion in damages as well as the right to revoke Shell and Eni’s license to OPL 245, which may have billions of barrels of oil.
OPL 245 was created in 1998, when the petroleum minister Dan Etete carved out the offshore license and awarded it to his own company, Malabu Oil and Gas Ltd. Through successive regimes it was taken from him, awarded to Shell, and then given back, locking the companies and government in legal disputes.
To win control of OPL 245, Shell and Eni paid the Nigerian government $1.1 billion. The companies agree the payment was made, but disagree about whether those funds then went to bribes. According to accusations laid out by the government in the lawsuit, the plan from the start was that former Nigerian government officials, including president Goodluck Jonathan, and Shell and Eni executives would receive personal payouts.
Some of the allegations in the lawsuit, however have been fiercely contested in the Milan criminal case.
Eni said some transactions associated with the $1.1 billion payment for OPL 245 were cleared by anti-money laundering authorities in the U.K., and that an expert witness that testified on its behalf in the Milan court said the terms around the deal were “perfectly valid, legal and compliant.”
The Nigerian complaint recounts allegations that Roberto Casula, a senior Eni executive, got $50 million in cash delivered to his home. But lawyers for Casula, Guido Alleva and Giuseppe Fornari, say that prosecutors in Milan weren’t able to back up the story. The one witness called to testify about the issue, wasn’t able to confirm the allegations, they said.
In another payment recounted in the lawsuit, Peter Robinson, then Shell’s regional vice president, ended up with “several hundred million Swiss francs” Nigeria believes was related to the OPL 245 deal that he may have intended to distribute to others.
Etete kept as much as $400 million for himself, which was “used on lavish personal expenditure for Etete and his family,” according to the Nigerian government’s court document. Some of that money was also allegedly used to pay a fine for money laundering Etete incurred during the period he was negotiating over OPL 245.
A spokesman for Jonathan said he was unaware of the lawsuit. A spokesman for Etete couldn’t be reached to comment. Eni declined to comment on the specific allegations regarding Casula, while reiterating its denial of any wrongdoing in relation to the deal.
After the payment in 2011 Shell and Eni were awarded the license, but the deal quickly fell apart. JPMorgan told Shell that one bank had rejected its attempt to transfer the initial $1.1 billion payment, according to the lawsuit. That bank had concerns the money was earmarked for Etete, according to the filing.
JPMorgan previously said in a separate filing that the bank returned the funds “for compliance reasons.” A spokesman declined to comment further.
The lawsuit, however, is short on details regarding allegations against many of the executives it mentions. It does have its fair share of colorful anecdotes.
It recounts how a former U.K. lawyer, who was paid $2 million, walked into a London police station in January 2014 with a suitcase of cash, and explained he’d received it as part of an “arrangement” with Etete.
The Nigerian government says none of the transactions could have happened without the support or willful “blind eye” of Shell CEO Peter Voser, former CFO Simon Henry, and current head of integrated gas Wetselaar, among others. Its oil and gas exploration director at the time Malcolm Brinded was “closely involved,” the government claims.
Brinded is also on trial in Milan. He pointed to a previous statement denying wrongdoing. Henry, who no longer works for Shell, referred questions back to the company when reached on a personal email account.
Shell last year accused Robinson of taking kickbacks, but said he purposely tried to hide it from the company. It also said the kickbacks were taken as part of a different oil block purchase that occurred around the same time, and were an isolated incident having nothing to do with OPL 245. Robinson, also on trial in Italy, has previously denied he did so. His lawyer in Italy reiterated the denial by email, in response to allegations raised in the lawsuit.
Further, the government says Claudio Descalzi, who was then head of exploration, was close to the OPL 245 negotiations. He has since been promoted to CEO and remains in that position. He is a defendant in the Milan case, and has denied any illegal behavior related to OPL 245. The company spokesperson pointed to the board’s decision to reaffirm its confidence in Descalzi.
Shell, Eni and other defendants in the London case have 45 days to respond to the court filing dated April 8. The Milan trial is ongoing and could take years. Two men that helped negotiate the settlement but didn’t work directly for either company have already been found guilty.