$1.1bn Malabu Scam: Leaked emails show Shell, Eni, Jonathan’s aides conspired to divert money to Etete

Despite repeated denial by oil giants, Shell and Eni, that they did not know that the $1.1 billion they paid for OPL 245 was meant to be diverted to Malabu Oil and Gas, leaked emails have revealed that both companies were culpable in the plan to transfer the money to the dubious firm.

Malabu Oil and Gas, a shady oil firm, was incorporated by former Petroleum Minister, Dan Etete, five days before the oil bloc was awarded to it by the military regime of Sani Abacha.

Shell and Eni claimed however that they only paid the money to the Federal Government and have dismissed suggestions they knew the money would ultimately be sent to Malabu and Mr. Etete, an ex-convict.

But leaked email exchanges between officials of Shell and Eni obtained and published by Italian journalist, Claudio Gatti, showed that both companies actually wanted the money transferred to Malabu.

The mail showed the oil giants were involved in plans to make the transfer possible through the Federal Government, and also conspired to hide their involvement in the shady deal.

According to the leaked emails, six weeks before the deal was signed, an escrow agreement dated March 7, 2011 was drafted among the Federal Government, Malabu Oil and Gas Limited, Nigerian Agip Exploration Limited (NAE) (Eni’s Nigerian Subsidiary), Shell Nigeria Exploration and Production Company Nigeria Limited (SNEPCO) (Shell’s Nigerian Subsidiary), and J.P. Morgan Chase with the following passage showing the money was destined for Malabu:

(C) Pursuant to the Resolution Agreement, NAE, on behalf of SNEPCO and NAE, has the obligation to wire transfer to the Escrow Account an amount of XXX million US Dollars ($XXX) to the benefit of FGN, within five (5) days from the date of execution of the Resolution Agreement.
(D) The above amount shall be released by the Escrow Agent to MALABU on behalf of FGN pursuant to this Agreement, upon receipt of the Completion Notice.

But on March 30, 2011, conscious of the fact that it was getting involved in a criminal act, Shell sent another email to Eni which basically suggested a “new structure” for the deal that would hide its involvement with Malabu.

This new structure, which was later agreed by all involved in the deal, including the Federal Government, was tagged Resolution Agreements (RAs). An email from an Eni manager to Shell reads:

In general terms, Shell’s proposal to divide the RA in two separate agreements addresses part of Eni’s concerns, although it will need some re-work on our side. More specifically:
[…]
– FGN is envisaged to be the one paying Malabu directly. There is no need to refer to the Escrow Agreement no2, NAE paying to FGN etc; FGN shall pay Malabu and the fact that the money shall come to FGN from NAE is another matter dealt with under RA2.
– In general, we request to de-link, as much as possible RA 1 from RA 2, so that completion of RA 2 in [sic] not subject to the transaction under RA 1. […]

Two weeks before the deal was finalized, a meeting was held to discuss the final resolution.

The leaked email revealed that those present at the meeting were: Malabu representatives, Rasky Gbingie, Dele Adesina (Mr Etete’s lawyer), Shell managers Peter Robinson and Nike Olafimihan, Eni managers Roberto Casula, Vicenzo Armanna and Giorgio Vicini, Attorney General Mohamed Adoke and officials of the Ministry of Justice and Department for Petroleum Resources.

The minutes of the meeting reads:

Agenda
Discussion of draft OPL 245 agreements
The parties discussed the New Structure of agreements, in particular with respect to the comments from DPR.
Parties agreed to have 3 separate agreements and discussed the body of the text.
Finally parties agreed on the final wording as per attached documents
Way forward
The 3 agreements have been initialled by the respective parties. Parties to define the date for execution of the agreements.

A final email from Eni to Shell days before the deal was finalized further discussed whether Malabu would be in the room when the deal would be signed with the Federal Government.

Would Malabu attend the meeting as well? The resolution agreement with Malabu shall be signed at the same date, as well as the Shell resolution agreement. Is this going to happen?

When UK-based transparency organization, Global Witness, confronted Eni with the email exchanges it replied saying the organization misinterpreted the letters.

“We believe the interpretation in your letter is erroneous,” Eni said.

It added that it contracted a United States audit firm to investigate its involvement in the deal and nothing incriminating was found against it.

It however did not provide further details of the audit when Global Witness demanded for them.

Eni, however, did not respond to Global Witness’ questions, but in April 2015, it told Global Witness that: “We do not agree with the premise behind various public statements made by Global Witness about Shell companies in relation to OPL 245”.

On Tuesday, a British judge turned down request by Mr Etete for $85 million to be released to his fraudulent company, Malabu.

Justice Edis of the Southwark Crown Court ruled that he was not sure the administration of President Goodluck Jonathan acted in Nigeria’s interest when it approved the transfer of the money to Malabu.

“I cannot simply assume that the FGN, which was in power in 2011 and subsequently until 2015, rigorously defended the public interest of the people of Nigeria in all respects,” the judge ruled.

The judge also suggested that former President Goodluck Jonathan was beneficiary of the slush funds and was the person Italian investigators referred to by the code name “Fortunato”.

“The suggestion from the wiretaps is that “Fortunato” was implicated and I am told that this was a reference in code (not subtle) to the former president of Nigeria, President Goodluck Jonathan,” the judge said.

Fortunato is an Italian word that means “luck”, “lucky” or “good luck”.

Calls for government to cancel the deal and prosecute culprits

The director of Global Witness, Simon Taylor, said, “We now know beyond all possible doubt or denial that Shell and Eni knew exactly where their payment was going.

“It’s high time they stopped trying to mislead the public and investors about their role in this dirty deal, which deprived Nigeria’s citizens of over $1.1bn.

“To put that into context, $1.1 billion is equivalent to 80% of Nigeria’s health care budget for 2015.”

A Nigerian anti-corruption campaigner, Dotun Oloko, said “the Nigerian government needs to demonstrate to Nigerians and the wider public that it can and will rigorously defend Nigeria’s public interest by cancelling this contract and prosecuting all found culpable of wrongdoing.”

Nicholas Hildyard of The Corner House argued that “this evidence shows that high level executives in Shell personally took part in the creation, negotiation, and execution of this corrupt deal.

“It is now a matter of urgency that the judicial authorities in the UK, the US, the Netherlands and Nigeria, join forces with the Italian investigation into Eni, and properly investigate the role of Shell and its senior executives in this deal.”

Antonio Tricarico of Re:Common said: “Given the gathering pace of investigations into this deal and a call by the Nigerian House of Representatives to cancel the deal in 2014, investors in Shell and Eni, including the Italian public should demand to know why they were exposed to such risk.”