Shell, Eni Face Italian Charges Over Nigerian Deal -Update
December 20 2017 - 1:31PM
Dow Jones News
By Eric Sylvers in Milan and Sarah Kent in London
Royal Dutch Shell PLC, the chief executive of state-backed
Italian energy company Eni SpA and other industry executives must
stand trial on corruption charges connected to a 2011 Nigerian oil
deal, an Italian judge ruled Wednesday.
The prosecution marks a rare case in which top oil executives
could face jail time for corruption allegations.
Prosecutors say in court documents that Eni CEO Claudio Descalzi
and the other executives at both Shell and Eni knew most of the
$1.3 billion the companies paid to the Nigerian government to
acquire the drilling rights would be distributed as bribes.
Prosecutors say Goodluck Jonathan, the Nigerian president at the
time of the deal, received part of the kickbacks.
Mr. Jonathan didn't respond to a request for comment. He has
previously denied being involved in any corruption.
The trial is due to start March 5 and represents a significant
development in one of the oil industry's biggest corruption
scandals.
Prosecutors are expected to delve into the operations of the two
companies and more widely into an industry that often operates in
countries where graft is pervasive like Nigeria. The global oil
industry has long faced charges of corruption though trials have
rarely reached into the very upper echelons of management of giants
like Shell and Eni.
Other executives indicted include Paolo Scaroni, Eni's CEO at
the time of the deal, and Malcolm Brinded, Shell's global
exploration and production chief at the time of the deal. Mr.
Descalzi was Eni's head of exploration and production when the deal
was done.
Eni's board of directors said it had "full confidence" that Mr.
Descalzi wasn't involved in illegal conduct and "reaffirmed its
confidence that the company wasn't involved in alleged corrupt
activities." Eni said it reached these conclusions after several
independent investigations into the matter.
"We aren't happy that this is going to trail, but now there will
be the judicial process and the company and Descalzi will have the
opportunity to defend themselves," Eni Chairwoman Emma Marcegaglia
said in an interview.
Shell said it was "disappointed" by the indictment, but that it
believes a trial will show there is no case against the company or
its former employees. "There is no place for bribery or corruption
in our company."
Mr. Scaroni, who is no longer at Eni, declined to comment. In
the past he has denied any wrongdoing.
Mr. Brinded, who has since left Shell, said through a spokesman:
"I have done nothing wrong and believe that will become clear in
any legal proceedings."
The trial is likely to last about 18 months. The decision can be
appealed twice meaning five years or more can pass before a
definitive verdict.
Shell shares traded down 0.7% and Eni was down 0.4%, while other
major oil companies traded somewhat higher Wednesday.
The charges revolve around a giant oil block off Nigeria's
Atlantic coast known as OPL 245, which Shell has pursued for nearly
two decades. Long the dominant oil company in Nigeria, the
British-Dutch oil giant spent years in legal battles with
successive Nigerian governments over the bloc's ownership.
Write to Eric Sylvers at eric.sylvers@wsj.com and Sarah Kent at
sarah.kent@wsj.com
(END) Dow Jones Newswires
December 20, 2017 13:16 ET (18:16 GMT)
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