Shell Admits Knowing About Payments to Malabu

• Shell Admits Knowing About Payments to Malabu

Royal Dutch Shell has said it knew that some of the payments it made to Nigeria for the rights to an oil field would go to Malabu Oil and Gas, a company associated with a former Minister of Petroleum Resources and convicted money launderer, Dan Etete.

Shell spokesman, Andy Norman, was quoted as saying that the group had known that the Nigerian government “would compensate Malabu to settle its claim on the block.”

Shell previously had said that its payments from the 2011 deal went to the Federal Government.

Reuters quoted Norman as saying in an email that while Shell knew that Etete was “involved” with Malabu, it had not confirmed that he controlled the company.

Etete was convicted of money laundering in a separate case in France in 2007.

“Over time, it became clear to us that Etete was involved in Malabu and that the only way to resolve the impasse through a negotiated settlement was to engage with Etete and Malabu, whether we liked it or not,” Norman said.

He added that the company believed the settlement was a fully legal transaction with the Nigerian government.

The statement comes amid mounting pressure over the deal, in which Shell and Italy’s Eni paid $1.3bn for the rights to Oil Prospecting Licence 245, which industry estimates say could hold more than nine billion barrels of oil.

Courts in Nigeria and Italy are investigating the purchase of the block. Italian prosecutors have asked for Eni’s Chief Executive Officer, Claudio Descalzi, to be sent to trial in connection with the case.

Eni said neither the company nor Descalzi were involved in any allegedly illicit conduct.

A Nigerian court ordered the asset temporarily seized in January at the request of the Economic and Financial Crimes Commission, but the move was overturned.

The OPL 245, believed to be the largest in Africa, was said to have been fraudulently acquired from the Federal Government by Malabu Oil and Gas Limited in 1998.

The oil block, which was awarded by Etete to Malabu Oil and Gas, a company in which he was a shareholder, was sold to Shell and Eni in what has been described as a shady transaction.