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Eni Kicks as FG Demands $1.1bn Advance from Shell, Italian Giant in OPL 245 Case

Eni Kicks as FG Demands $1.1bn Advance from Shell, Italian Giant in OPL 245 Case

 
 

Ejiofor Alike with agency reports

The Nigerian government yesterday asked a court in Milan, Italy, to order Royal Dutch Shell and Eni to pay the sum of $1.092 billion as an immediate advance payment for damages in the Malabu oil scandal, one of the oil industry’s biggest-ever corruption scandals.During the hearing of the corruption allegation linked to the acquisition of the Oil Prospecting Lease (OPL) 245 offshore field, lawyer to the federal government, asked for advance payment ahead of a more comprehensive damages package to be decided by the court at a later date.

But in a swift reaction, Eni said yesterday in a statement made available to THISDAY by the Nigerian Agip Oil Company (NAOC) that it was “highly disappointed that the prosecutors continue to use as evidence flows of money which occurred after the Company paid for the OPL 245 licence, in order to support its accusations of corruption against the company. Payment for OPL 245 was made directly to the Nigerian government, in a clear, linear and transparent manner using an internationally-renowned bank. Eni was not aware, and was in no way required to be aware, of any flows of funds following its direct payment”.

 

The statement signed by Folu Olapade argued that the civil party wrongfully presents a negotiation between Eni and Shell on one side and Nigerian government representatives on the other as illicit, alleging that the two companies were aware of unlawful intentions of the Government representatives.

“Eni maintains that it acted lawfully, dealing with the ministries of a sovereign government, traditionally competent with respect to operations such as these, acting properly in negotiations of this complexity through transversal, complex and proven processes for evaluation and analysis,” the statement added.

“In relation to the civil party’s suggestions that the price paid materially undervalues the license, Eni emphasizes that the economic offer was congruous and reasonable when considering the value of the OPL245 exploration field and the investments necessary to be able to put it into production.

“The final amount paid by Eni to the Nigerian government was agreed by the parties following an in-depth geological, technical and economic examination; it also considers the historical evolution of the Nigerian and international oil markets. Suffice it to consider, for example, that at the end of September 2011 the Brent was valued over 100 dollars, while today it is around 40 dollars.

“Moreover, the transaction price of $1.09 billion, net of the signature bonus, equals the assessment of OPL 245 made by IHS for Shell in its 2009 arbitration against the Federal Government of Nigeria, when the British/Dutch company had no interest whatsoever in underestimating the asset to which it was laying claim,” Eni explained.

Reuters reported that the case involves the 2011 acquisition of oil block prospecting licence by Eni and Shell, following the payment of $1.3 billion to the Nigerian government for the OPL 245 offshore field.

According to Reuters, “Shell says that the 2011 agreement was a settlement of long-standing litigation following the previous allocation of the oil block by the federal government to Shell and Malabo.”

It can be recalled that in July this year, prosecutors asked that the Chief Executive Officer of Eni, Claudio Descalzi, be jailed and also for Eni and Shell to be fined together with some of their former and present executives.

In addition, the prosecutors also requested for the confiscation of the sum of $1.092 billion from all the defendants in the case, an amount which is the equivalent of the bribes that was alleged to have been paid out.

The lawyer representing Nigeria, Lucio Lucia, yesterday, joined in requesting for the seizure of that amount.

source:- https://www.thisdaylive.com/index.php/2020/09/10/eni-kicks-as-fg-demands-1-1bn-advance-from-shell-italian-giant-in-opl-245-case/