Shell’s $1.1bn deal for Nigerian oil field funded alleged bribery scheme, report finds

'Military-era' terms delivered more value to oil giants, allowing them to justify $1.1bn up-front fee, which was allegedly paid to former oil minister Dan Etete and other senior officials the independent
Share this Story:

Shell’s controversial $1.1bn deal for a Nigerian oil licence included “unprecedented” terms which may have helped fund an alleged bribery scheme, according to new analysis.

The Anglo-Dutch company, along with Italian oil giant Eni, are on trial in Italy over allegations that almost all of the money they paid for the licence funded bribes for Nigerian officials including a former president and various middlemen.

New research by oil consultancy firm Resources for Development found that the terms of the contract meant that Nigeria effectively gave up its share of future revenues from the block.

Former oil minister Dan Etete

The type of contract, known in the industry as “sole risk”, is particularly favourable to oil firms and has not been used in Nigeria since the end of military rule 20 years ago.

“We’ve known of allegations of vast bribery in this deal for years,” said Barnaby Pace, a campaigner at Global Witness.

“Now we’ve learned that Shell and Eni profited unfairly through military-era contract terms meaning that it was Nigeria’s share of oil that was used to fuel profiteering and payoffs.”

Analysis of documents including Shell and Eni’s assessments of the licence shows that the contract terms boosted the value that the oil companies could extract from the block, allowing them to justify paying $1.1bn up front for it. 

That money then allegedly went to former Nigerian oil minister Dan Etete and was “intended for payment to President [Goodluck] Jonathan, members of the government, and other Nigerian public officials”, Italian prosecutors say.

1,082 total views, 3 views today

Leave a Reply

Your e-mail address will not be published. Required fields are marked *