Claudio Descalzi, chief executive of Eni, is under investigation in an international bribery case stemming from the $1.1bn acquisition of a Nigerian oilfield in 2011, the Italian state-controlled company said.
The announcement by Eni, which denies any “illegal conduct” in the matter, is a significant development in a long-running political and legal drama surrounding one of Nigeria’s most prized oil blocks with reserves estimated at 9bn barrels.
It also marks a test for the Italian government and its reformist prime minister Matteo Renzi, who picked Mr Descalzi to run Eni starting in April amid hopes that he would be part of a new generation of leaders at the country’s state-controlled companies.
Mr Descalzi was elevated from within Eni, where he worked under former chief executive Paolo Scaroni, and news of the probe into the Nigerian deal could trigger criticism that he was too much of an insider to usher in a clean break from the past.
The probe by Italian prosecutors based in Milan was launched after Eni, in partnership with Royal Dutch Shell, gained control of the concession known as OPL 245 in a deal with the Nigerian government. The inquiry is at a preliminary stage. Such judicial actions are fairly common in Italy and could amount to nothing.
Most of the money paid by the European oil majors was ultimately funnelled via President Goodluck Jonathan’s administration in Nigeria to Malabu Oil and Gas, whose main beneficiary is allegedly Dan Etete.
Mr Etete, who has said he was merely a consultant to Malabu, was minister of petroleum in the government of former dictator Sani Abacha in 1998 when the company was awarded the OPL 245 block.
Some of the money paid by the European oil majors for the OPL 245 block was transferred from Malabu accounts to other shell companies, in transactions that have raised questions about the role of Nigerian government officials.
Global Witness, the anti-corruption watchdog, has alleged that the 2011 deal was structured so that the Nigerian government acted as a conduit for a settlement, putting distance between the international oil companies and end beneficiaries.
Investigations are likely to probe whether Eni officials knew in advance where the funds were ultimately headed. Mr Descalzi was head of Eni’s exploration and production unit at the time of the 2011 deal.
“The people of Nigeria deserve to know how this $1.1bn was diverted away from the public purse and what roles the companies and senior executives played,” said Barnaby Pace, who has followed the case closely for Global Witness.
A London court this week froze $190m in funds related to the case at the request of the Italian prosecutors. Nigeria’s House of Representatives called earlier this year for the Malabu deal to be cancelled and the proceeds retrieved, although no action has been taken.
In its statement, Eni said the “entire payment” for the licence was “made uniquely” to the Nigerian government. “Eni is co-operating with the Milan prosecutor’s office, and is confident that the correctness of its actions will emerge during the course of the investigation,” Eni added.
ENI shares closed down 1.05 per cent at €18.87.
Shell said, “Shell companies have acted at all times in accordance with both Nigerian law and the terms of the OPL 245 resolution agreement with FGN (Federal Government of Nigeria). We are open and transparent about all payments made by Shell companies to the FGN and how much they were.”
“Any questions about any arrangements between the FGN and Malabu should be directed to them.”
AIT.
