Don't neglect to pay the middleman: How Shell and Eni ended up on trial

Some of the key issues in the trial came to light during the two separate civil suits filed by a Nigerian and a former Russian diplomat.

The logo of Royal Dutch Shell is seen in London. Picture: EPA.

LONDON - Seven years ago, two middlemen launched civil lawsuits to seek payment for helping arrange a $1.3 billion oil deal in Nigeria.

Now, nine current and former executives or contractors from Italy’s Eni and British-Dutch giant Royal Dutch Shell, including ENI Chief Executive Claudio Descalzi, have been accused by Italian prosecutors of paying bribes to secure the license to explore a large offshore oilfield in 2011.

If found guilty, the individuals on trial face possible jail terms for bribery. All deny wrongdoing, as do Shell and Eni.

The criminal trial will proceed in Milan on 20 June after a short initial hearing on 14 May.

Some of the key issues in the trial came to light during the two separate civil suits filed by a Nigerian, Emeka Obi, and a former Russian diplomat, Ednan Agaev, a Reuters review of court filings shows.

Both men said they were owed millions of dollars by a Nigerian company, Malabu Oil and Gas, for arranging meetings with Shell and Eni.

The judge in Obi’s case upheld evidence that Obi arranged meetings between former Nigerian oil minister Dan Etete, who was convicted of money laundering in an unrelated case in France in 2007, and representatives of Eni, and that he negotiated on Etete’s behalf with Shell.

In addition, documents produced in Agaev’s case showed that when Eni and Shell paid for the license, they deposited more than $1 billion into a Nigerian government escrow account in London but most of the money later ended up with Malabu, which was controlled by Etete, the judge said.

The judges found that, in a conflict of interests, Etete had a stake in Malabu and was also oil minister when the Nigerian government awarded the company the license to explore the field in 1998, a decision that was reversed in 2001, reinstated in 2006 and later challenged by Shell.

These details helped Italian prosecutors put together their case, industry insiders say.

Etete denies charges of bribery for channeling money from the deal to Nigerian politicians. He and his lawyers did not respond to requests for comment by phone and email.

Shell said by email that if improper payments are shown to have taken place, they were not made with Shell’s “knowledge, authorization or on its behalf.” It said it believes the judges will find there is “no case” against Shell or its ex-employees.

Eni said by email that it could not comment on the case. It has previously said it concluded the deal with the Nigerian government without the involvement of intermediaries and that it had no commercial agreement with Malabu.