Investigative non-profit group Global Witness announced Wednesday that Royal Dutch Shell is under formal investigation by the Milan Public Prosecutor’s office for “international corruption” offenses relating to a deal for oil block OPL 245 in Nigeria. Shell's partner in the deal, Italian oil firm Eni, is already under investigation.
Italian paper Corriere Della Sera said that Shell's headquarters in the Hague had been raided by Italian and Dutch financial police, with the raid lasting through the night. Nigerian Attorney General Mohammed Bello Adoke's home in the Netherlands was searched as well.
Global Witness said that it had played an instrumental role in the investigation, providing Italian authorities with the details of a lease sale that it alleges was corrupt. U.K., U.S. and Dutch agencies have also contributed to the effort to trace funds related to the transaction.
“Shell and Eni have always denied knowledge of the corruption at the heart of this deal, but evidence we have published shows otherwise. The news of an investigation into Shell shows that their role played in this deal may backfire on them. Shell and Eni exposed their investors to massive risks and have been tainted by this theft from Nigerian citizens.” said Simon Taylor, a director of Global Witness.
The group said that it discovered that when OPL 245 was sold in 1998 for $20 million, it went to Malabu Oil & Gas, a company owned by Nigeria's then-Oil Minister, Dan Etete. The block was resold to Shell and Eni in 2011, with the Nigerian government acting as middleman, for $1.3 billion, said Global Witness.
In 2014, the Nigerian House of Representatives called for the deal to be cancelled and declared it “contrary to the laws of Nigeria”.
The Wall Street Journal, citing Italian court filings, suggests that documents related to the deal show that the funds Eni and Shell paid to secure block OPL 245 went substantially to Malabu Oil, and the prosecution "believes that a considerable part of that sum was destined for the remuneration of Nigerian public officials." Shell told the Journal that the payments went to the Nigerian government, and that questions about their disbursements after that point should be directed to Nigerian authorities and to Malabu Oil.
The oil block is estimated to contain 9 billion barrels of recoverable crude oil, putting it well within the “supergiant” category of the world’s largest fields; at current prices, the market value of these reserves over the lifespan of the field would be roughly $360 billion.
Shell confirmed the raid in a statement to the press on Wednesday. “We can confirm that representatives of the Dutch Financial Intelligence and Investigation Service (FIOD) and the Dutch Public Prosecutor recently visited Shell at its headquarters in The Hague. The visit was related to OPL 245, an offshore block in Nigeria that was the subject of a series of long-standing disputes with the Federal Government of Nigeria. Shell is cooperating with the authorities and is looking into the allegations, which it takes seriously."
Eni and its CEO Claudio Descalzi have denied wrongdoing in the case.