Shell, Eni Trial on Malabu Oil Deal Re-adjourned to June

The celebrated trial of top executives from oil majors, Eni and Shell, over alleged corruption in Nigeria, which kicked off yesterday in Milan has been re-adjourned till next month.

An agency report says the Milan court said it would assess requests from third parties including a series of international non-profit organisations, to join the case.
Reuters reported that at yesterday’s hearing, a lawyer representing the Nigerian Government, Domenico Cartoni Schittar, said he was stepping down from his role.

In his comments in a signed document seen by Reuters, Cartoni Schittar said he had given up on a mandate, which he said had become “awkward”.
The long-running graft case revolves around the 2011 purchase by Eni and Shell of Nigeria’s OPL-245 offshore oilfield for about $1.3 billion.

Milan prosecutors allege bribes were paid to win the license to explore an oil block that holds an estimated nine billion barrels of oil but which has never entered into production.
Global Witness, a campaign group that has conducted its own investigations, has described the case as one of the biggest corruption scandals in the history of the oil industry.

The Chief Executive Officer of Eni, Claudio Descalzi, and former Shell Foundation Chairman, Malcolm Brinded, are standing trial along with 11 other defendants and the two companies.

All the accused have denied any wrongdoing.
The former Shell executives involved in the case have claimed that a procedural error was made when the original ruling to send the case to court was taken and have applied to Italy’s Supreme Court to void it.
The Supreme Court is scheduled to judge that appeal on June 12.

“The prosecution by the Milan public prosecutor was triggered by a complaint filed in autumn 2013 by Global Witness, The Corner House, Re: Common and Nigerian anti-corruption campaigner, Dotun Oloko. The case had also been investigated in Nigeria and the United States following the groups’ complaints. Public prosecutors in the Netherlands are also investigating the case,” the statement said.

Speaking about the coming landmark trial, Barnaby Pace of the Global Witness said: “This trial should signal a turning point in the way the oil industry has operated for far too long. Some of the most senior executives of two of the biggest companies in the world could face prison sentences for a deal struck under their watch. Shell has recently accused one of these former executives of taking kickbacks in a separate Nigerian deal.”

Speaking on the latest development, the Chairman Human and Environmental Development Agenda, (HEDA) Lanre Suraju, said: “This trial is a clear signal that it is no longer business as usual for oil companies in Nigeria. It’s time justice is served.”

Casula, who will also stand trial in Milan over the OPL 245 case, took a leave of absence from the company in April. He had told Reuters that because of the recent allegations made against him, he had decided to take a temporary leave of absence from work.

“My primary objective is to fully and promptly address these allegations and cooperate to the fullest extent with the judicial authorities,” he had stated.

For years, Shell had claimed that it only paid the Nigerian government for the OPL 245. But after the joint investigations of Global Witness and the United Kingdom investigative journalism group, Finance Uncovered, Shell confessed it had dealings with “convicted money launderer and former Minister of Petroleum Resources, Dan Etete”.

Global Witness claimed that Etete had awarded the OPL 245 oil block to his secretly owned company, Malabu, while serving as oil minister.

The case against Eni and Shell brought by the Milan public prosecutor alleged that $520 million from the deal was converted into cash and intended to be paid to the then Nigerian President, Goodluck Jonathan, members of the government and other Nigerian government officials.

The prosecutor further alleged that money was also channelled to Eni and Shell executives with $50 million in cash delivered to the home of Eni’s then Head of Business for Sub-Saharan Africa, Casula.

“This is not a case involving a few rotten apples. The evidence points to systemic corruption – from the top down. In this case, Italy has championed the rule of law over abusive corporate power,” Nick Hildyard of Corner House said in the statement.

The statement added: “Spokespeople for Shell have referred Global Witness to the company’s statement following the company’s indictment, ‘We are disappointed by the outcome of the preliminary hearing and the decision to indict Shell and its former employees. We believe the trial judges will conclude that there is no case against Shell or its former employees’.”

Meanwhile, Eni has said in a statement on its website regarding the case that the trial “will give the opportunity to Eni to fully defend its position and to provide full evidence of the correctness of the actions taken with respect to the OPL 245 transaction.”

Regarding the allegations against Eni’s CEO, the company said: “Eni’s Board of Directors has reaffirmed its confidence that the company was not involved in alleged corrupt activities in relation to the transaction. The Board of Directors also confirmed its full confidence that chief executive Claudio Descalzi was not involved in the alleged illegal conduct and, more broadly, in his role as head of the company. Eni expresses its full confidence in the judicial process and that the trial will ascertain and confirm the correctness and integrity of its conduct.”

On March 28, 2018, a Shell statement sent to Global Witness had said: “Shell filed a criminal complaint with the Dutch authorities because we suspect a crime may have been committed against Shell by a former employee in relation to the sale of Oil Mining Lease (OML) 42 in Nigeria in 2011. Based on what we know from an internal investigation, we suspect this is a case of possible kickbacks, related to the actions of a former employee who left Shell more than three years ago. The individual in question is Peter Robinson, then VP Commercial Sub-Saharan Africa.”

The Milan court has set the next hearing for June 20.