A new analysis has found that oil giants Shell and Eni\u2019s controversial deal for a Nigerian oil licence included unprecedented terms which funded an alleged bribery scheme, NAN reports.<\/p>\n
Mr Olanrewaju Suraju, Chairman, Human and Environmental Development Agenda Resource Centre (HEDA), a non-governmental organisation said on Thursday in Lagos the terms replicated military-rule era \u201cSole Risk\u2019\u2019 contracts.<\/p>\n
He added that it boosted Shell and Eni\u2019s internal valuations of the oil deal enough to justify the companies paying 1.1billion dollars upfront.<\/p>\n
The head of the non-partisan human rights and development league, said Italian Prosecutors alleged that the 1.1billion dollars paid by Shell and Eni for the OPL 245 licence was used to pay former Nigerian oil Minister, Dan Etete.<\/p>\n
It was \u201cintended for payment to President Jonathan, members of the government, and other Nigerian public officials,\u2019\u2019 Suraju alleged in a statement.<\/p>\n
Shell, Eni and some of their senior managers are now standing trial, charged with international corruption and with prosecution pending in other countries.<\/p>\n
The statement noted that the award of military era style contracts for deep water fields to huge international oil companies appeared to be unprecedented since the advent of civil government in Nigeria.<\/p>\n
\u201cThe deal transferred massive economic benefits to the companies at the expense of the Nigerian people by giving away Nigeria\u2019s right to its share of the oil produced, terms which resemble \u2018Sole Risk\u2019 contracts granted only to Nigerian companies during military rule in Nigeria\u2019s Deep Water.<\/p>\n
\u201cThe Nigerian Department of Petroleum Resources currently lists the OPL 245 license as a Sole Risk type contract in its annual report.<\/p>\n
\u201cThe analysis of Shell and Eni\u2019s valuation documents prepared before they agreed to the deal in 2011 appears to show that the transfer of Nigeria\u2019s share of future revenue to the companies was essential for the companies to be willing to pay over a billion dollars upfront, money that prosecutors say was used to pay massive bribes.<\/p>\n
\u201cThe analysis also found that the Nigerian state\u2019s ability to buy their rights back was heavily restricted in the deal with Nigeria having to pay 650 million dollars plus interest upfront to re-acquire a stake worth an estimated 2 billion dollars in future revenue.<\/p>\n
\u201cThese rights will still leave Nigeria with a far lower share of the oil production than recommended by the IMF, and 15 per cent or 3.5 billion dollars lower than previous terms for the same license,\u2019\u2019 the statement said.<\/p>\n
The analysis was carried out by expert oil consultancy firm Resources for Development, commissioned by NGOs Global Witness, HEDA, Re:Common and The Corner House using publicly available documents, including Shell and Eni\u2019s valuations of the oil block.<\/p>\n
An analysis published in late 2018 by the same firm showed that the terms of the contract could reduce the Nigerian government\u2019s revenue from the fields by 5.86 billion dollars over the lifetime of the project when compared to the standard Production Sharing Contract (PSC) terms in place in Nigeria since 2005, assuming an oil price of 70 dollars per barrel.<\/p>\n
Emails between Shell managers at the time showed they were aware that the deal would not give Nigeria rights to the share of its oil that is usual in deals between country governments and international companies.<\/p>\n
HEDA said Nigeria\u2019s most senior civil servant in the Department of Petroleum Resources objected strongly to the terms of the deal at the time, calling it \u201chighly prejudicial to the interests of the Federal Government\u2019\u2019.<\/p>\n
It said Nigerian ministers appeared to have ignored or overruled these concerns. Shell managers had been briefed that the ministers who overruled civil servants to approve the deal were likely to receive bribes.<\/p>\n
The statement said Nigeria is currently pursuing civil claims against Shell and Eni over the deal which they claim \u201cShell and Eni engaged in for bribery and unlawful conspiracy\u2019\u2019 to harm the Federal Republic of Nigeria and that they dishonestly assisted corrupt Nigerian government officials.<\/p>\n
The current Nigerian Attorney General, Abubakar Malami, reportedly suggested that Nigeria could reach a settlement with the companies with a deal, including Nigeria re-acquiring a stake in OPL 245.<\/p>\n
President Buhari reportedly rejected any settlement, ordered a halt to development of the oil block until all issues are resolved and the legal process has run its course.<\/p>\n
The statement said that Barnaby Pace, a campaigner at Global Witness said: \u201cWe\u2019ve known of allegations of vast bribery in this deal for years.<\/p>\n
\u201cNow we\u2019ve learned that Shell and Eni profited unfairly through military era contract terms meaning that it was Nigeria\u2019s share of oil that was used to fuel profiteering and payoffs.<\/p>\n
\u201cIt is simply unacceptable that Shell and Eni should be allowed to hold on to this scandalous deal.<\/p>\n
\u201cThese companies and Nigerian officials agreed a sweetheart deal that deprives Nigeria of money it badly needs to build schools and pay doctors.<\/p>\n
\u201cPresident Buhari should reject any deal that leaves the OPL 245 oil licence with these companies,\u2019\u2019 said the Suraju.<\/p>\n
\u201cShell and Eni represented their OPL 245 contract as a production sharing system yet it includes no sharing of production for Nigeria.<\/p>\n
\u201cThis shockingly poor deal must be cancelled,\u2019\u2019 said Nick Hildyard of The Corner House a member of the league.<\/p>\n
\u201cThe Italian government is discouraging Nigerian migrants trying to reach Italy by claiming that it will help them at home, but Italy\u2019s biggest multinational, part owned by the state, is accused of depriving the Nigerian people of billions.<\/p>\n
\u201cThe OPL 245 scandal appears to show that Italians are not helping the poorest, but profiting from them,\u2019\u2019 said Antonio Tricarico of Re:Common, member of the league of NGOs.<\/p>\n
HEDA boss also said that Shell and Eni were asked for their comments on the analyses but both companies and their managers had denied wrongdoing and criminality in the deal.<\/p>\n
Shell stated that \u201cin line with correct legal process, many of these issues will be considered by the court and we do not wish to interfere with those proceedings.\u2019\u2019<\/p>\n
Eni claimed that in the light of their ongoing trial, Eni was \u201cunable to disclose information relevant for the pending proceedings, nor is it otherwise willing to publicly disclose data that are sensitive in nature.\u2019\u2019<\/p>\n
They noted that Eni appointed experts in court will \u201ccover the significant benefits for Nigeria\u2019\u2019 from the deal and that it would be shown to be \u201ctransparent, lawful and beneficial for Nigeria\u2019\u2019.<\/p>\n","protected":false},"excerpt":{"rendered":"
A new analysis has found that oil giants Shell and Eni\u2019s controversial deal for a Nigerian oil licence included unprecedented terms which funded an alleged bribery scheme, NAN reports. Mr Olanrewaju Suraju, Chairman, Human and Environmental Development Agenda Resource Centre (HEDA), a non-governmental organisation said on Thursday in Lagos the terms replicated military-rule era \u201cSole […]<\/p>\n","protected":false},"author":62,"featured_media":7731,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[24,15],"tags":[573,202,228,593],"class_list":["post-9078","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-all-news","category-economy","tag-bribe","tag-oil","tag-oil-production","tag-shell"],"yoast_head":"\n