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Italy probes Eni CEO over Nigerian OPL 245 deal

By Businessnews Staff on September 13, 2014

Milan prosecutors have placed the Chief Executive Officer of Italian oil and gas company, Eni, under investigation over alleged bribes paid for a lucrative Nigerian oil concession, according to a report by theAssociated Press.

Eni confirmed on Thursday that Claudio Descalzi and another official were under investigation but denied wrongdoing, saying the investigation would confirm their innocence. It pledged to cooperate with investigators.

The purported bribe concerns Eni’s purchase of the lucrative OPL 245 oil block in 2011. Eni and Shell insist they paid the Nigerian government directly for the concession; prosecutors are investigating whether the money went to a front company believed to be controlled by a former Nigerian oil minister.

Descalzi and Eni’s chief development, operations and technology officer under “preliminary investigation,” the Rome-based company said in a statement distributed by the Italian stock exchange.

Eni, which didn’t specify the nature of the probe, “continues to deny any illegal conduct,” according to a report by Bloomberg.

Descalzi is suspected by prosecutors of playing a role in the corruption of Nigerian politicians and bureaucrats, Italian newspaper, Corriere Della Sera, reported. The oil-licence deal, closed in 2011 when Descalzi was Eni’s head of exploration and production, previously came under scrutiny in the Nigerian Parliament.

Eni’s stock dropped 2.2 per cent to €18.66 at 4:53pm in Milan trading, the fourth-biggest decliner in the Stoxx Europe 50 Index.

“The market didn’t react violently because it doesn’t think that this can compromise the business,” Massimo Intropido, head of Milan-based financial research firm, Ricerca Finanza, said in a telephone interview withBloomberg.

Eni teamed with Royal Dutch Shell Plc in 2011 to buy Oil Prospecting Licence 245 for $1.1bn. The deal was challenged last year by a Nigerian parliamentary committee, which recommended revoking the rights after finding the acquisition process “highly flawed.”

Global Witness, a London-based corruption watchdog, has also criticised the deal and the involvement of Dan Etete, a former Minister of Petroleum Resources in Nigeria.

“This is not the way oil deals should be conducted,” Barnaby Pace, a member of the oil team at Global Witness, said in an interview.

Shell acted in accordance with Nigerian law and the terms of the agreement with the Nigerian government, The Hague-based Shell said in an e-mailed statement.

Calls by Bloomberg News to the offices of Fabio De Pasquale and Sergio Spadaro, the two Milan prosecutors cited in the Corriere report, went unanswered. Shell didn’t immediately respond to a request for comment.

Descalzi was promoted to CEO in May in the biggest corporate appointment under the watch of Italian Prime Minister Matteo Renzi. Italy controls Eni through the Treasury and a 26 per cent stake owned by state lender, Cassa Depositi e Prestiti SpA.

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