- Malabu: FG Slams Shell, Eni With $1.1bn Lawsuit in UK
The Federal Government said it had filed a $1.1bn lawsuit against Royal Dutch Shell and Eni in a commercial court in London on Thursday in relation to a 2011 oilfield deal in Nigeria.
The two oil majors are embroiled in a long-running corruption case revolving around the purchase of Oil Prospecting Licence 245.
OPL 245, which is one of the biggest sources of untapped oil reserves on the African continent with reserves estimated at nine billion barrels, is also at the heart of an ongoing corruption trial in Milan, Italy, in which former and current Shell and Eni officials are on the bench.
Milan prosecutors alleged bribes totalling around $1.1bn were paid to win the licence to explore the field which, because of disputes, had never entered into production.
The new London case also related to payments made by the companies to get the OPL 245 oilfield licence in 2011, Reuters reported on Thursday.
“It is alleged that purchase monies purportedly paid to the Federal Republic of Nigeria were in fact immediately paid through a company controlled by Dan Etete, formerly the Nigerian Minister of Petroleum, and used for, among other things, bribes and kickbacks,” Nigeria said on Thursday.
“Accordingly, it is alleged that Shell and Eni engaged in bribery and unlawful conspiracy to harm the Federal Republic of Nigeria and that they dishonestly assisted corrupt Nigerian government officials.”
The Nigerian government also included Nigeria-based Malabu Oil & Gas in the lawsuit, and a company called Energy Venture Partners Ltd., according to Bloomberg.
Malabu was allegedly controlled by Etete, who took possession of the $1.1bn payment and used it for bribes and kickbacks, according to the lawsuit.
Antonio Secci, a lawyer for Etete, was quoted as saying that the London suit “surprises” because the Nigerian government is already seeking damages in Milan.
“This situation cannot be represented again in London because it is repetitive,” he said.
Shell said “the 2011 settlement of long-standing legal disputes related to OPL 245 was a fully legal transaction with Eni and the Federal Government of Nigeria, represented by the most senior officials of the relevant ministries.”
Eni was quoted as saying in an emailed statement that it rejected “any allegation of impropriety or irregularity in connection with this transaction.”
“Eni (…) signed a commercial agreement in 2011 for a new licence for OPL 245 with the Federal Government of Nigeria and the Nigerian National Petroleum Corporation and the consideration for the licence was paid directly to the Nigerian government,” it said.
Nigeria has already filed a London case against a US bank, JPMorgan, for its role in transferring over $800m of government funds to Etete, who has been convicted of money laundering.
In another separate trial, a Milan court in September found a middleman guilty of corruption after prosecutors alleged he had received a mandate from Etete, who had denied any wrongdoing, to find a buyer for OPL 245, collecting $114m for his services.
Last month, a global anti-corruption and accountability watchdog group, Global Witness, calculated that the OPL 245 deal deprived Nigeria of double its annual education and healthcare budget.
Oil Holds Near Highest Since 2018 With Global Markets Tightening
Oil held steady near the highest close since 2018, with the global energy crunch set to increase demand for crude as stockpiles fall from the U.S. to China.
Futures in London headed for a third weekly gain. Global onshore crude stocks sank by almost 21 million barrels last week, led by China, according to data analytics firm Kayrros, while U.S. inventories are near a three-year low. The surge in natural gas prices is expected to force some consumers to switch to oil, tightening the market further ahead of the northern hemisphere winter.
China on Friday sold oil to Hengli Petrochemical Co. and a unit of PetroChina Co. in the first auction of crude from its strategic reserves said traders with the knowledge of the matter. Grades sold included Oman, Upper Zakum and Forties.
Oil has rallied recently after a period of Covid-induced demand uncertainty, with some of the world’s largest traders and banks predicting prices may climb further amid the energy crisis. Global crude consumption could rise by an additional 370,000 barrels a day if natural gas costs stay high, according to the Organization of Petroleum Exporting Countries.
“Underpinning the latest bout of price strength is a tightening supply backdrop,” said Stephen Brennock, an analyst at PVM Oil Associates Ltd.
Various underlying oil market gauges are also pointing to a strengthening market. The key spread between Brent futures for December and a year later is near $7, the strongest since 2019. That’s a sign traders are positive about the market outlook.
At the same time, the premium options traders are paying for bearish put options is the smallest since January 2020, another indication that traders are less concerned about a pullback in prices.
Unlocking Investments into Africa’s Renewable Energy Market
The African Energy Guarantee Facility (AEGF) is launching a virtual roadshow of free webinars allowing a deeper understanding of risk issues for renewable energy projects on the continent, and conversations around risk mitigation solutions. The first webinar will take place on Thursday, 23 September from 14:30-16:00 hrs. EAT.
The session will be oriented on how to get more energy projects from the drawing board to the grid. While the energy demand in African economies is expected to nearly double by 2040, and although the potential for renewable energy is 1,000 times larger than the demand, only 2GW out of almost 180GW of this new renewable power were added on the African continent.
Clearly not good enough! To improve the situation within the next two decades, new solutions need to be implemented urgently. De-risking and promoting private sector investments will play a crucial part of it.
In this 90-min interactive session, AEGF partners: the European Investment Bank (EIB), KfW Development Bank, Munich Re and the African Trade Insurance Agency (ATI) will share their experience and provide valuable insights on how they were able to come together and design practical solutions for investors and financiers of green energy projects in Africa aligned with SDG7 objectives.
Across Africa, the complexity of renewable energy projects and their long tenors hold back crucial energy investment. Tailored to the specific needs and risk profiles of sustainable energy projects, AEGF will tackle the investment challenge by providing underwriting expertise and capacity tailored to market needs.
The AEGF will significantly boost private investment in sustainable energy projects, both expanding access to clean energy and contribute to achieving UN Sustainable Development Goals. The scheme supports new private sector investment in eligible renewable energy, energy efficiency and energy access projects in sub-Saharan Africa.
Shell Signs Agreement To Sell Permian Interest For $9.5B to ConocoPhillips
Shell Enterprises LLC, a subsidiary of Royal Dutch Shell plc, has reached an agreement for the sale of its Permian business to ConocoPhillips, a leading shales developer in the basin, for $9.5 billion in cash. The transaction will transfer all of Shell’s interest in the Permian to ConocoPhillips, subject to regulatory approvals.
“After reviewing multiple strategies and portfolio options for our Permian assets, this transaction with ConocoPhillips emerged as a very compelling value proposition,” said Wael Sawan, Upstream Director. “This decision once again reflects our focus on value over volumes as well as disciplined stewardship of capital. This transaction, made possible by the Permian team’s outstanding operational performance, provides excellent value to our shareholders through accelerating cash delivery and additional distributions.”
Shell’s Upstream business plays a critical role in the Powering Progress strategy through a more focused, competitive and resilient portfolio that provides the energy the world needs today whilst funding shareholder distributions as well as the energy transition.
The cash proceeds from this transaction will be used to fund $7 billion in additional shareholder distributions after closing, with the remainder used for further strengthening of the balance sheet. These distributions will be in addition to our shareholder distributions in the range of 20-30 percent of cash flow from operations. The effective date of the transaction is July 1, 2021 with closing expected in Q4 2021.
Shell has been providing energy to U.S. customers for more than 100 years and plans to remain an energy leader in the country for decades to come.
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