Leaked Records Show Shell’s Complicity in Massive Oil Corruption Scandal

New leaked records undercut Shell’s vigorous denials it was
involved in a sprawling Nigerian corruption scandal.

Shell CEO Ben van Beurden picked up the phone and called his
chief financial officer hours after Dutch police raided his
offices. “I trust you have been informed about what happened at the
office,” van Beurden said to CFO Simon Henry on the phone on
February 17 last year. “So it looks as if they have some form of
coordination between the Italian prosecutor, possibly … with a link
into the [U.S. Department of Justice], but we’re not sure yet,” van
Beurden said, not knowing authorities were listening in on the
other end of the line, foreign
policy reports.^[1]

His suspicions were right, and their subsequent conversation
sheds light on Shell’s complicity in one of the largest corruption
scandals in Big Oil’s history — after the company vigorously denied
any role in it for years.

That early morning February raid centered on an oil deal Shell
and Italian oil giant Eni struck with Nigeria. They paid the
Nigerian government $1.3 billion in 2011 for rights to a giant oil
field off the Nigerian coast. After the deal was struck, most of
that money mysteriously went missing from public coffers.

New legal filings, emails, and recorded phone conversations
reviewed by Foreign Policy showed top Shell
executives played a hand in the huge corruption scheme, which
reached the highest echelons of the government. The phone
recordings and documents from European authorities were
obtained by anti-corruption watchdogs Global Witness and Finance
Uncovered. Buzzfeed and Italian newspaper Il Sole 24
Or first broke the story.

The new revelations could throw Shell into a world of legal
trouble. They also shed light on the shadowy world of oil deals,
and how far Shell was willing to go to nab their share of the oil
field, known as OPL 245, through a network that spanned former
British spies and corrupt Nigerian officials. The tendrils of the
scandal reached the highest echelons of the Nigerian government,
including former President Goodluck Jonathan. 

The latest developments come hot on the heels of the United
States repealing an anti-corruption rules
for extractive industry companies like Shell, a move Big Oil
widely lauded. It also illustrates how resource-rich countries like
Nigeria often fall victim to the “resource curse” – where corrupt
officials steal the revenue from selling off natural resources,
keeping the masses mired in poverty. 

One of Africa’s largest petro-states, Nigeria is ranked^[2] 136 out of 176
countries in corruption by anti-corruption watchdog
Transparency International. Meanwhile, famine spurred by the Boko
Haram militant insurgency in the country’s north, threatens
millions of Nigerians, including some 500,000 children. The money
paid by Shell and Eni for the OPL 245 field is about 1.5 times what
the U.N. says is needed to resolve the famine crisis.

The deal centered around former Nigerian oil minister Dan Etete.
While serving as oil minister, Etete secretly acquired rights to
OPL 245 through a shadowy front company called Malabu, which later
funneled over $1 billion of the deal away from the Nigerian people
and directly into the pockets of senior Nigerian officials. (Etete
was later convicted in a Nigerian court on a separate money
laundering probe.)

Van Beurden suspected the Dutch police must have found some dirt
in the records their raids obtained. “There was apparently some
loose chatter…particularly the people that we hired from MI6 who,
er, must have said things like, ‘Well, yeah, you know, I wonder who
gets a pay-off here and whatever,’” he said, referring to former
British intelligence operatives Shell hired to help navigate the
seedy world of West African oil politicking. But it wasn’t just
“loose chatter.”

Senior Shell employees openly discussed in email how they knew
over $1 billion of their money would go to Etete and others in
political kickbacks, according to email records. The company
decided to move forward with the deal anyway, denying for years up
to this point its employees did anything wrong and claiming it only
knew it was paying the Nigerian government.

One email from Shell official Guy Colegate to colleagues in
March, 2010 sums it up: “Etete can smell the money,” Colegate
wrote. “If, at nearly 70 years old he does turn his nose up at 1.2
bill he is completely certifiable…but I think he knows its [sic]
his for the taking. I don’t think he will push it away,” he wrote.
That email was forwarded to then-Shell CEO Peter Voser, one of the
world’s most powerful oil execs at the time. No records available
show he informed authorities or stood in the way of the deal.

Another Shell advisor, former British intelligence service
official John Copleston, wrote about Etete’s graft plan to senior
Shell executives in 2009 as they began laying out various deals for
a share of the oil field. “E[tete] claims he will only get 40m of
the 300m we offering-rest goes in paying people off,” Copleston
wrote.

For Shell, the stakes couldn’t have been higher: OPL 245, one of
Africa’s most valuable oil fields, contains an estimated nine
billion barrels of untapped oil, worth nearly $500 billion even
with today’s bargain bin oil prices. Its eventual purchase boosted
the world’s fifth-largest company’s proven reserves by a third
(proven reserves are a key statistic for shareholders).

The field has been at the center of legal battles since 1998,
when Etete first acquired rights to it through his front company.
Months before it finally sealed the deal in 2011, Shell had to pay
$30 million in a separate settlement on bribery charges in
Nigeria.

Now the Anglo-Dutch oil giant was in the lurch once again. “This
dawn raid is, I won’t say premature, but it’s, we were not, we
hadn’t concluded our own work,” van Beurden said, referring to an
internal Shell investigation. They then mulled whether they should
inform the U.S. Securities and Exchange Commission of the predawn
raid, but opted against it because it would be “share price
sensitive.”

“At this point in time, everything seems to be share price
sensitive,” Henry says on the phone, chuckling.

Shell denied any knowledge of improper payments to Malabu or
others up to Sunday. “It is Shell’s position that none of those
payments were made with its knowledge,” Shell said in a statement
Sunday.

On Monday, after Global Witness issued a new report outlining the
findings of the leaked documents, a Shell spokesman appeared to
walk back that position in an email statement
to FP.^[3]

“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,” the spokesman said. He added, “we
believe that the settlement was a fully legal transaction.” Shell
did not dispute the veracity of the of the leaked
documents. 

Italian prosecutors beg to differ. According to documents from
prosecutor’s office in Milan made public, here’s who got what in
the pay-off:

• Nigerian
  businessman Aliyu Abubakar withdrew $54,418,000 in cash.
• $466,065,965.44 withdrawn in cash and subsequently funneled to
  government officials including President Goodluck Jonathan,
  Attorney General Mohammed Bello Adoke, Minister of Petroleum
  Diezani Alison-Madueke, Minister of Defence and former National
  Security Advisor Aliyu Gusau.
• $10,026,280 to former Attorney General Christopher Adebayo Ojo
• $11,465,000 paid to former Senator Ikechukwu Obiorah

Eni officials also received funds in retrocession (in essence,
reimbursement for multiple layers of insurance after a deal goes
through). One, Chief Development — Operations & Technology
Officer Roberto Casula, received $50 million delivered in cash.

In Italy, prosecutors have recommended Casula and Eni CEO
Claudio Descalzi stand trial in the corruption case. The Eni board
issued a statement saying they retained “total confidence” in
Descalzi. Eni also released a statement saying it was
complying with authorities but denied any
wrongdoing. Representatives of Voser, Etete, and
Jonathan haven’t yet issued any statements about the
revelations.

Troops Confront Armed Robbers in Military
Uniforms

Troops of 72 Special Forces Battalion Makurdi, deployed at
Yelwata, in Guma LGA which is a Border town between Benue and
Nasarawa State while on patrol along Road Yelwata-Kadarko to
monitor post election activities in that axis had an encounter with
some suspected armed robbers in the early hours of 15th of March
2019.

The suspected armed robbers were dressed in military desert
camouflage and robbing motorists along the road.

However, the gallant troops of the Battalion engaged the robbers
in a gun battle which resulted in the elimination of one of the
armed robbers during the encounter, while others took to their
heels.

Items recovered include :
a. One locally made rifle.
b. Three rounds of 7.62MM special ammunition.
c. One empty case of7.62MM Special ammunition.

Similarly , some cultists who have been terrorising the
North-Bank general area in Makurdi metropolis were arrested by
Intelligent Operatives of 72 Special Forces Battalion deployed
within the town to monitor post election activities. The suspects
are Mr Shuaibu Sale, Mr Umar Sule and Mr Idris Bawa. Items
recovered from them incude:
a. One locally made revolver pistol.
b. One round of 9mm
c. A poly bag containing weeds suspected to be Indian Hemp.

Members of the Public are reminded to be security conscious at
all times and enjoined to report any suspicious activities of or
movements of individuals or groups to the nearest law enforcement
agents for prompt action.

Forwarded herewith are some pictures of the incidents for your
publication please.

SAMSON ZHAKOM
Captain
Assistant Director
Army Public Relations
707 Special Forces Brigade Makurdi.