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FCPA Blog Daily News

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Thursday
Sep112014

Eni CEO investigated for $1 billion Nigeria oil deal

The CEO of Italy's biggest oil company, Claudio Descalzi, is under investigation by Milan prosecutors for alleged corruption tied to the company's 2011 acquisition of a Nigerian deepwater offshore block for $1.09 billion.

State-controlled Eni bought a 50 percent interest in the OPL 245 block in 2011. Royal Dutch Shell holds the other 50 percent stake, Petro Global News reported Thursday.

Eni said all the money for the purchase went to the Nigerian government and Malabu Oil and Gas. Malabu reportedly had close ties to former Nigeria oil minister Dan Etete.

Eni denies any "illegal conduct" and said the money was not used to influence public officials or the purchase process.

Another Eni officer, Roberto Casula, chief of development of operations and technology, is also under investigation.

The probe comes after a British court, acting at the request of Milan prosecutors, froze two bank accounts belonging to Emeka Obi that contain a combined $190 million.

Obi is thought to have served as an intermediary for the OPL 245 deal.

Last year, Obi won a lawsuit against Malabu for allegedly failing to pay him $110 million for bringing Eni into the OPL 245 deal.

OPL 245 has estimated reserves of about 9 billion barrels of oil, more than enough to keep China running for two years.

British police opened an investigation last year into the OPL 245 transaction. Transparency campaigners in Nigeria had complained that Malabu Oil and Gas was registered just five days before it was awarded block OPL 245 for just $2 million. It then flipped the block to the Eni / Shell venture for $1.09 billion.

"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 spokesperson said in July 2013.

In a statement, Eni said its cooperating with the investigation and "is confident that the correctness of its actions will emerge during the course of the investigation."

*     *      *

in 2010, Eni and a Dutch subsidiary, Snamprogetti Netherlands B.V., paid $365 million to resolve FCPA-related charges for Snamprogetti's role in the TSKJ-Nigeria joint venture.

The TSKJ partners together paid more than $130 million in bribes to Nigerian officials to develop oil and gas processing facilities on Bonny Island, U.S. prosecutors said.

In addition to Eni / Snamprogetti, the partners were France's Technip, Houston-based KBR, and JGC of Japan.

The case ranks as the sixth biggest FCPA enforcement action of all time.

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Nicolas Torres is a staff writer for Petro Global News, where a version of this post first appeared.