Italian oil giant hit by Nigeria corruption probe

Shares in Italian energy giant ENI slid on Thursday after it emerged that the company`s chief executive is being investigated over suspected corruption linked to a billion-dollar oil deal in Nigeria.

AFP| Last Updated: Sep 11, 2014, 19:47 PM IST

Rome: Shares in Italian energy giant ENI slid on Thursday after it emerged that the company`s chief executive is being investigated over suspected corruption linked to a billion-dollar oil deal in Nigeria.

A Milan prosecutor is probing the role of the CEO Claudio Descalzi, his predecessor and another ENI executive over their role in the Italian group`s 2011 acquisition, in partnership with Shell, of the rights to a field known as OPL245.

The field has been estimated to contain as much as nine billion barrels of crude.

Under the deal, ENI made a payment to the Nigerian government of $1.09 billion (844,000 euros) to secure joint ownership of the block along with Shell, which had previously taken a 40-percent stake and had begun to develop the field.

Most of the money ENI paid was subsequently passed on to Malabu Oil and Gas, a company believed to be owned by Chief Dan Etete, a former Nigerian Oil Minister.

In an episode that has come to be regarded as emblematic of Nigeria`s problems with corruption, Etete had awarded the rights to the block to Malabu in 1998, at a time when he was close to Nigeria`s then-military dictator General Sani Abacha.

ENI confirmed that Descalzi, who headed the company`s oil division at the time, had been placed under preliminary investigation by a Milan prosecutor along with another company executive, the head of exploration Roberta Casula.

The company said its executives were being probed after a British court on Tuesday accepted the Milan prosecutor`s request to freeze two bank accounts.

According to Italian daily Corriere della Sera, these were Anglo-Swiss accounts containing a total of $190 million in the name of Emeka Obi, a suspected intermediary in the OPL245 deal.

Corriere said the court had accepted the prosecutor`s argument that there was reason to believe the money may have been paid as part of an attempt to corrupt public officials.

Last year, Obi sued Malabu via Britain`s High Court and won an order that the company pay him $110 million in unpaid fees related to the deal which brought ENI into OPL245.

ENI insisted the company`s action had been beyond reproach.

"The entire payment for the issuance of the license to Eni and Shell was made uniquely to the Nigerian government," a statement said.

It added: "Eni is cooperating with the Milan prosecutor`s office, and is confident that the correctness of its actions will emerge during the course of the investigation."

ENI shares were down by nearly one percent in early afternoon trading on Thursday in an otherwise broadly flat market.