Eni and Shell Face 'Biggest Corporate Bribery Trial' Over Nigeria Oil Deal

An Italian judge has ordered Italian oil giant Eni and Royal Dutch Shell to stand trial for alleged corruption in Nigeria.

The case refers to the controversial $1.3 billion Malabu Oil deal. Italian prosecutors alleged the two oil giants illegally bought the offshore OPL 245 oil block in Nigeria's oil-rich Niger Delta region in 2011.

Prosecutions claimed that $801.5m was transferred to the accounts of Malabu Oil and Gas, deemed as the "fraudulent holder" of the OPL 245 block. The company is owned by Dan Etete, who worked as Nigerian oil minister under the administration of Sani Abacha from 1995 to 1998.

OPL 245 payments have been frozen in bank accounts around the world.

The two companies and another 13 people, including Eni CEO Claudio Descalzi and former chairman of the Shell Foundation Malcolm Brinded, have been investigated. They will stand trial in March, Reuters reported.

Both companies denied any wrongdoing.

Shell said in a statement: "We are disappointed by the outcome of the preliminary hearing and the decision to indict Shell and its former employees. We believe the trial judges will conclude that there is no case against Shell or its former employees."

Shell previously said it was aware that some of the payments for rights to the oilfield had gone to Malabu, but said the transactions were fully legal.

Eni said the company and its CEO had not been involved in any wrongdoing.

"Eni's Board of Directors has reaffirmed its confidence that the company was not involved in alleged corrupt activities in relation to the transaction," the company said.

"The Board of Directors also confirmed its full confidence that chief executive Claudio Descalzi was not involved in the alleged illegal conduct and, more broadly, in his role as head of the company. Eni expresses its full confidence in the judicial process and that the trial will ascertain and confirm the correctness and integrity of its conduct."

Prosecutors also claimed that $520 million from the deal was converted into cash and intended to be paid to the then Nigerian President Goodluck Jonathan, who denied the allegations.

Shell
A Shell logo is pictured outside a Royal Dutch Shell petrol station in Hook, near Basingstoke on January 20, 2016. Both Shell and oil giant ENI have been ordered to stand trial for alleged corruption in Nigeria. ADRIAN DENNIS/AFP/Getty Images

Campaign group Global Witness (GW) and other organizations claimed that much of the $1.3 billion in payments for the block did not go to the state but instead went to Etete, who was convicted of money laundering in 2007.

GW welcomed the judge's ruling, claiming that it is the first time that a company as large as Shell is ordered to stand trial over bribery charges.

"The Nigerian people lost out on over $1 billion, equivalent to the country's entire health budget, as a result of this corrupt deal," said Simon Taylor, co-founder of GW.

"They deserve to know the truth about what happened to their missing millions. We welcome the prosecutor's efforts to bring this case to trial. It will be the biggest corporate bribery trial in history and act as a warning to others who see corruption as a route for quick financial wins."

In October, the U.K. returned £85 million of funds that had been frozen at the request of Italian prosecutors investigating the deal.