British police probe Shell, ENI over Malabu oil deal
British police are investigating a money-laundering allegation related to a big oil field bought by Shell and ENI from Nigeria for $1.3 billion (â‚¬984 million), after most of the cash they paid ended up in a company linked to a former Nigerian oil minister.The probe concerns offshore block OPL 245, which industry sources say contains up to 9.23 billion barrels of crude - more than enough to keep China running for 2½ years - the ownership of which had been in dispute for more than a decade.
'The proceeds of crime unit is investigating a money-laundering allegation in the UK in connection with OPL 245. The investigation is at an early stage,' a UK spokesman said.
Transparency campaigners, who asked the UK to look into the matter, assert that Shell and ENI used the Nigerian government as a go-between to obscure the fact that they were dealing with former oil minister Dan Etete, who also has a 2007 money-laundering conviction in France related to bribes he was alleged to have taken when in government.
In his capacity as oil minister, Etete awarded block OPL 245 in 1998 for a payment of just $2 million to Malabu Oil and Gas, a company in which he played a prominent role.
The critics claim that Shell and ENI, which haven't been accused of any legal wrongdoing, wanted to distance themselves from Etete given his reputation and his involvement in the original award of the oil block to Malabu.
A Shell spokesman said it had purchased the block from the government, making no payment to Malabu, and that it acted transparently and in accordance with Nigerian law.
ENI declined to comment but it told shareholders in May that the transaction was with the government, not Malabu.
Etete was not contactable for comment. His lawyer did not immediately respond to a request for comment.
While Shell and ENI say they bought the block from the Nigerian government, for which they paid it $1.3 billion in 2011, Nigeria says it was helping resolve an ownership dispute over the block between Shell and Malabu and immediately transferred $1.09 billion from the sale to Malabu. The government retained the remainder.
Etete had awarded the block to Malabu during the rule of military dictator Sani Abacha, whose son Mohammed and other close allies were shareholders in the company. That deal was later annulled after the death of Abacha by a new government that judged the award improper.
In a UK court case brought by Emeka Obi against Malabu for unpaid fees relating to his help in brokering the Shell/ENI deal, the judge in that case, Justice Elizabeth Gloster, concluded in her ruling last week that 'From its incorporation and at all material times . . . Etete had a substantial beneficial interest in Malabu.'
Etete said he was only a consultant to the company, but he represented the company in the court case and in all negotiations with the oil majors, and he told the court he was the sole signatory to its accounts.