MALABU SCANDAL: Shell, Eni officials’ trial continues as anti-corruption group head appears before court

The trial of officials of oil giants Eni and Shell over the controversial Malabu scandal will resume Wednesday at the Milan Palace of Justice in Italy, PREMIUM TIMES has learnt.

The Milan court’s decision came after Simon Taylor, a founding director of anti-corruption group, Global Witness, appeared before it as witness on Wednesday.

Mr Taylor’s Global Witness, together with PREMIUM TIMES and its London partner, Finance Uncovered, have for years done extensive investigations into the long-running controversial oil deal.

The Malabu deal, struck in 2011 under former President Goodluck Jonathan, saw the Nigerian government as a negotiator in the sale of OPL 245 oil block in offshore Nigerian waters.

Two international oil and gas giants, Royal Dutch Shell and Italian Agip-Eni, paid out about $1.1 billion to Dan Etete, a former Nigerian petroleum minister who had previously been convicted of money laundering in France. The payout would later become a subject of cross-border investigation spanning over six countries.

Eni CEO Claudio Descalzi and four ex-Shell managers, including former Shell Foundation Chairman, Malcolm Brinded, are on trial in one of the largest cases in the history of the oil and gas industry. All the accused have denied wrongdoing.

Two men named in the case – Emeka Obi, a Nigerian consultant in England, and Gianluca Di Nardo, an Italian – stood as middlemen in connecting parties and ensured the transfer of the funds through international bank accounts in the oil deal, prosecutors alleged. They were convicted last month in Italy.

At the Milan court on Wednesday, Mr Taylor appeared to explain how his organisation’s investigations over the last 25 years have shown that corruption is the glue that binds the exploitation of natural resources to conflict, environmental abuses and human rights abuses.

He also explained how he first heard about Malabu and OPL 245 in 2002 when Africa Energy Intelligence reported on their connection to Dan Etete. At the time, he said, there was an interest in looking into case studies of possible corrupt oil deals.

According to him, it was discovered there was a very large sum of money being paid for a Nigerian state asset that didn’t go to the government so some questions had to be asked.

Mr Taylor also narrated how Global Witness started asking Shell questions in 2008, concerned whether Shell understood that dealing with Mr Etete would be problematic but the company’s answers to questions in conversations and letters asking about OPL 245 were very general and didn’t answer the specifics.

In 2012, he said, Global Witness emailed Eni after seeing court documents where Ednan Agaev, an intermediary, sued in New York for a payment he wanted from Malabu out of the OPL 245 deal. He said Global Witness would later attend the Eni shareholders meeting to ask questions about the deal, specifically whether they knew Mr Etete had an interest in Malabu.

After one of Eni shareholders meetings, he said, Eni offered to meet Global Witness and partners but later walked out after their General Counsel was asked to explain some concerns.

But after seeing documents from the Nigerian House of Representatives investigation into the case, he said, a journalist visited addresses of the companies that received the OPL 245 money and discovered they didn’t exist or people there hadn’t heard of the companies.

Mr Taylor also explained how Global Witness investigated the beneficial ownership of Malabu where it was suspected Mr Etete had an ownership interest hidden under the fake name of ‘Kweku Amafegha’, adding that there were letters from Department for Petroleum Resources managers saying that the OPL 245 deal was not in the public interest.

PREMIUM TIMES gathered that no cross examination questions were asked by the defence and after few technicalities, the Wednesday proceedings ended. Court will resume next Wednesday 24th, this newspaper gathered.

Since 2012 when it first denied all allegations to PREMIUM TIMES, Shell had insisted that it only paid the Nigerian government for the OPL 245 oil block and did not know Mr Etete was the recipient or that he was an ex-convict.

But for the first time in 2017, Shell told the New York Times it had dealt with Mr Etete who awarded the OPL 245 oil block to his own secretly owned company, Malabu, while serving as petroleum minister from 1995-1998. But the oil company denied wrongdoing.

Several Nigerian government officials are believed to have received several million dollars in bribes for the enabling roles they played. Mr Jonathan, under whose watch the deal was struck, has also denied wrongdoing. The former president is not on trial over the long-running case.

Last week, PREMIUM TIMES reported that in a leaked internal memo seen by Reuters, Shell denied any connection between its officials and Messrs Obi and Di Nardo, the two convicted men.

“I would like to be clear that neither individual worked on behalf of Shell and Shell was not a party to their fast-track trial,” said Shell’s Legal Director, Donny Ching. The oil giant also said it expects the trial of its officials to drag for months.