$1.3 Billion Malabu Oil Fraud: BBC Investigation Nails Shell, Jonathan, Etete

The investigation by the BCC into OPL 245, a precious oil bloc is off the coast of Nigeria has stumbled on evidence that top Shell executives knew money paid to the Nigerian government for a vast oil bloc would be passed to a convicted money-launderer, Dan Etete.

The deal was concluded while Shell was operating under a probation order for a separate corruption case in Nigeria. OPL 245 is an oilfield in Nigeria whose estimated nine billion barrels of oil are worth nearly half a trillion dollars at today’s prices.

New evidence by BBC investigation shows just how far Shell was prepared to go to get its hands on it. Standing between Shell and its prize was Dan Etete, whose company acquired the rights to OPL 245 for a tiny sum while he was oil minister of Nigeria. He was later convicted of money laundering in a different case.

Shell and ENI, the Italian oil company eventually acquired OPL 245 in 2011 – by paying $1.3bn to the Nigerian government. An amount far bigger than the entire health budget of the country.

According to the BCC, the government promptly passed on more than $1bn of the money to a company called Malabu, which was controlled by Dan Etete. The investigation also revealed that Shell representatives were negotiating with Etete for a year before the deal was finalised.

In March 2010, an email from a former MI6 officer employed by Shell shows the company believed Etete stood to benefit from the deal.

“Etete can smell the money. If, at 70 years old, he does turn his nose up at 1.2 billion he is completely certifiable and we should then probably just hold out until nature takes its course with him.”

That email was forwarded to the then Shell chief executive Peter Voser – one of the most powerful men in the oil business – showing knowledge of Etete’s involvement went right to the top.

Shell also had good reason to suspect that hundreds of millions would end up in the pockets of Nigerian politicians including the former President Goodluck Jonathan.

In an email from July, the same Shell employee says Etete’s negotiating strategy is “clearly an attempt to deliver significant revenues to GLJ [Goodluck Jonathan] as part of any transaction.”

Italian prosecutors allege that $466m were laundered through a network of Nigerian bureaux de change to facilitate payments to President Jonathan and other politicians.

The emails seen by the BCC seem to show that a number of Shell executives were aware that a company controlled by Etete would ultimately receive over a billion dollars and were advised by their own employees that the money was likely to end up being paid in political kickbacks.

In a statement Shell said it did not believe that any current or former employees had acted illegally. It also said that if any payments were made by Malabu to government officials then it was done without its knowledge, authorization or on its behalf.

The BCC said ENI is yet to respond to its enquiries.

The question for Shell is what on earth were they doing negotiating with a convicted money launderer, who they suspected might pass the money to the president, months after reaching a previous bribery settlement in the same country.

Matthew Page worked for the US State Department in Nigeria for 15 years. He told the BBC: “At a time when Shell should have been cautious having just settled a previous case, rather than walk away from a deal with clear corruption risks, they doubled down.”

Italian courts will decide whether to proceed with criminal proceedings against Shell and its partner  ENI on 20 April.

 

 

 

 

Source: BCC