Prosecutors in Italy have launched proceedings aimed at ascertaining if possible corruption took place in a deal that granted Italian company ENI, the largest foreign oil and gas producer in Africa, and Royal Dutch Shell Nigerian oil block OPL 245 in 2011.

The block, which was sold for $1.1billion, is reported to have been acquired through illegal means, as the money from the deal is to have been diverted from public funds. 

Oil manufacturing machinery

In 1998, Former Minister of Petroleum Resources, Dan Etete, granted OPL 245 to Malabu Oil and Gas, an entity to which he was a principal shareholder. PREMIUM TIMES reported that Etete, using a psedonym, Kweku Amafegha, registered Malabu Oil Ltd. to complete the scheme. The company only paid $2 million in the deal in 1999.

PREMIUM TIMES also reports that the shareholders of Malabu during registration in 1998 were Mohammed Abacha, the son of late military dictator, Sani Abacha, (received 10 million shares); Kweku Amafegha (the fictional character created by Mr. Etete), with 6 million shares; and Wabi Hassan (wife of Hassan Adamu, former Nigerian ambassador to the US) with 4 million shares.

Despite this, Royal Dutch Shell of Nigeria and Malabu Oil were engaged in a power struggle for the block in 2001, after the government stripped Malabu Oil of its license to the OPL 245 and established Shell Nigeria as rightful licensee. This however, was not enough to quell the disagreement, which raged until 2011 when ENI and Shell Nigeria acquired the field through "official" means, for $1.1 billion.

Malabu Oil, resurfacing again, took over $1billion from the proceedings. It was revealed that the Attorney General and Minister of Justice, Mohammed Adoke, greenlighted the transfer of the money to two Malabu accounts some days before the current Finance Minister, Ngozi Okonjo-Iweala, was to begin her tenure.

ENI, today vehemently denying any illegal conduct during its buy of oil block OPL 245, says it will cooperate with Milan authorities. In a statement released Thursday they alleged that they paid for the license of the block "uniquely" to the Nigerian government. "ENI is confident that the correctness of its actions will emerge during the course of the investigation," the 60-year-old energy company stated. 

Contrary to this claim, court evidence has revealed that Shell Nigeria and ENI knew unquestionably that the money was not going to the government but to Malabu Oil. Further evidence cites the parties were in talks with Etete regarding the block during his tenure as oil minister.

Today's funds, frozen in the UK and Switzerland, are held by Dan Etete's Malabu Oil and its affiliates, reports claim. 

ENI's shares have also dropped as a result of information which implicates high-level staff and directors in the scheme.

Dotun Oloko, an anti-corruption activist who has spoken out about the shady dealings, said “The freezing of $190m in proceeds from the OPL 245 oil deal is good news for the people of Nigeria, many of whom live in poverty despite the country’s oil wealth. $1.1bn was diverted from the public purse, this needs to be recovered as well as get to the bottom of the role companies and individuals played in this heist.” 

“The naming of Claudio Descalzi, ENI’s new CEO, its outgoing CEO Paolo Scaroni, and Roberto Casula its Chief development, operations and technology officer as suspects in the Italian bribery investigation should raise concerns in Italy about ethics standards in state owned companies. Today's news demonstrates our concerns around Descalzi's controversial appointment and represents a further setback for the Italian government which failed to achieve reform in a vote at the company AGM. Bold action against alleged mismanagement by ENI managers is urgently needed.” Said Antonio Tricarico, program director, of Re: Common.

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