Nigeria loses $6bn in a corrupt oil deal

A court in Milan is considering charges of corruption against Eni and Shell in a controversial oil deal that led to Nigeria losing an estimated $6bn.

The campaign group Global Witness has calculated the OPL 245 deal in 2011 deprived Nigeria of double its annual education and healthcare budget.

Eni and Shell are accused of knowing the money they paid to Nigeria would be used for bribes.

The companies wanted to acquire the rights to develop OPL 245 because it is estimated to contain nine billion barrels of oil.

The court in Milan is weighing evidence of how a former Nigerian oil minister, Dan Etete, awarded ownership of OPL 245 to Malibu, a company he secretly controlled.

He is accused of paying bribes to others in the government, such as former President Goodluck Jonathan, to ensure that the process went smoothly.

Shell and Eni are accused of knowing the $1.1bn they paid to Nigeria would be used for bribes, claims based on the content of emails which have since emerged.

The Italian and Anglo-Dutch energy giants deny any wrongdoing.

This unfolding scandal, which is being played out in an Italian court, has involved former MI6 officers, the FBI, a former President of Nigeria, as well as current and former senior executives at the two oil companies.

The former Nigerian oil minister, Dan Etete, was found guilty by a court in France of money laundering and it emerged he used illicit funds to buy a speedboat and a chateau. It is also claimed he had so much cash in $100 bills that it weighed five tonnes.

Global Witness has spent years investigating the deal which gave Shell and Eni the rights to explore OPL 245, an offshore oil field in the Niger Delta.

It has commissioned a new analysis of the way the contract was altered in favor of the energy companies and concluded Nigeria’s losses over the lifetime of the project would amount to $5.86bn, compared to terms in place before 2011.

The analysis was carried out by Resources for Development Consulting on behalf of Global Witness, as well as the NGOs HEDA, RE: Common and The Corner. The estimated losses were calculated using an oil price of $70 a barrel as a basis.

Eni has criticized the way it was calculated because it ignores the possibility that Nigeria had the right to revise the deal to claim a 50% share of the production revenues.

The outcome of the unprecedented court case in Milan could force the oil industry to change how it conducts its business, especially in countries where corruption is rife because more transparency about contracts and payments made would discourage fraud.

LEAVE A REPLY

Please enter your comment!
Please enter your name here