By way of a brief background, in 1998, the former convict and Abacha oil
minister, Dan Etete unlawfully awarded an oil prospecting licence, OPL 245 to a
company called Malabu, which he and Abacha’s son owned. Unfortunately for them
Sani Abacha died two months after the award and Obasanjo who had been
imprisoned by Abacha became President and subsequently revoked Malabu’s
licence. Obasanjo then awarded OPL 245 to Malabu’s technical partner, Shell.
Shell and Malabu subsequently became embroiled in various legal disputes
over the ownership of the licence even though neither party ever perfected
their title. These disputes raged until 29 April 2011 when, through a series of
back to back agreements brokered by the current Attorney General Mohammed
Adoke, Malabu agreed to surrender a licence that it never owned and the
Shell/Eni consortium acquired same without going through an open bidding
process as required by government policy.
This murky
deal was shrouded in secrecy. The Federal Government of Nigeria which awarded
the licence in breach of existing government policy did not inform Nigerians of
the process through which the licence was sold nor indeed how much the country
earned from the sale of what was considered to be one of the most lucrative oil
fields in Nigeria.
The
international oil companies similarly did not tell their shareholders how much
they paid or the process through which they acquired the licence. Unfortunately
for all the parties to the murky secret deal, the veil of secrecy was lifted a
few months after the deal was executed.
This was
because some disgruntled middlemen including one Emeka Obi of Energy Venture
Partners, took legal action against Malabu in the UK and US for failing to pay them
for services they had rendered and the court proceedings were public.
Eni’s
response to the 2011 revelations under its then CEO Paolo Scaroni was that
“negotiations and transactions of both Eni and Shell took place directly with
Nigeria's Federal Government, without the use of an intermediary” [1] However,
the UK court disagreed with Eni and ruled in July 2013 that Emeka Obi was
indeed a middleman who was entitled to a commission of some $110 million for
services rendered to Malabu in the matter of OPL 245.
The 2011
revelations also prompted a public outcry in Nigeria and elsewhere and a
coalition of concerned Nigerians and international civil society groups
reported the matter to criminal investigation agencies in multiple
jurisdictions including the UK, Italy and Nigeria.
The
Nigerian EFCC declined to investigate the matter unless the Attorney General
who was a party to the deal granted his consent, but the UK and Italian
authorities promptly opened separate but related investigations.
The
Italian authorities commenced investigation in September 2013 and in early
September 2014, it was revealed in the Italian media and elsewhere that the
Italian prosecutor had successfully restrained some $190 million of funds
linked to OPL 245 and that various individuals including Claudio Descalzi (the
current Eni CEO), Paolo Scaroni (his immediate predecessor), Luigi Bisignani (a
former convict and controversial middleman) and others including Emeka Obi were
under investigation for possible fraud, corruption and bribery of Nigerian
public officials.
In the
wake of these damning revelations a right royal rumble fight which is
threatening to drag in other combatants from near and far has broken out. In
the opening skirmish on 21 September 2014, a tearful Descalzi in an interview
with an Italian paper, La Repubblica [2], denounced his former boss and mentor
Scaroni. Descalzi declared that he and Scaroni were no longer on speaking terms
as a consequence of the OPL 245 fallout. Descalzi further muddied his
predecessor declared that, “I have done well, but unlike my predecessors, I am
neither a billionaire nor a millionaire.” Descalzi was even more scathing about
Bisignani and protested that, "The idea of being associated with Bisignani
and other middlemen with whom I have nothing to do does not make me sleep at
night”.
When the
interviewer asked Descalzi about the leaked transcripts of wire taped
conversations purportedly between him and Bisignani, Descalzi claimed that
Scaroni had invited him to his house and made him meet with Bisignani during
early discussions on acquiring OPL 245. Descalzi also claimed that subsequent
conversations with Bisignani were made from Scaroni’s phone.
The nub of
Descalzi’s defence would appear to be that he had nothing to do with any murky
plans to use unscrupulous middlemen like Bisignani to acquire OPL 245 and any
interactions with the disreputable Bisignani had been forced on him by his then
boss Scaroni who was a longstanding and close associate of Bisignani.
On 22
September 2014, in an interview with Il Fatto Quotidiano[3], Bisignani provided
a scathing rebuttal to Descalzi’s La Repubblica interview. In his interview
Bisignani described Descalzi as an ungrateful man who had turned on his mentor,
Scaroni. Bisignani also denounced Descalzi as someone who was lacking in
courage and whose tears were the crocodile tears of a man who was probably on
the verge of a nervous breakdown.
Bisignani
painted a picture of Descalzi as someone who would often call him for advice or
to provide information and seemed keen to make his acquaintance at the
time. Bisignani claimed that it was a matter of regret that Descalzi was now
seeking to throw mud at him when he had been a good friend to Descalzi.
Bisignani
seemed to be unaware of the fact that by professing in the interview to have
been a middleman in the OPL 245 deal he was directly contradicting the Eni/Scaroni
position that no middlemen were involved in the deal.
Bisignani
went on to proclaim that there was nothing unlawful about the role that he had
played in the deal alongside Obi and his partner, Gianluca di Nardo for which
they all deserved to be remunerated.
Bisignani
further asserted that Descalzi who had for years been the Head of Eni in Lagos
undertook to adopt the proposal that the middlemen had put forward. It should
be noted that the proposal that Bisignani was referring to was a proposal to
inflate the price (which was known as the Agreed Malabu Price) that Eni would
pay directly to Malabu for OPL 245 by some $200 million.
The AMP
plus any excess would be paid to Obi as the middleman and, he would retain any
excess as his fee and pass the AMP to Malabu. It is the excess that Bisignani
felt he and others were right to share in.
Bisignani
signed off his interview by asserting that Descalzi’s reported claim that he no
longer answered Scartoni’s call was a shame and untrue.
On the
same 22 September 2014, Descalzi wrote a short letter to La Repubblica in
response to the article the day before. In his letter, Descalzi said that it
was incorrect to claim that Scaroni decided everything about the Nigerian deal
as the article had suggested and that it was also incorrect to claim that he
had not spoken on the phone to Scaroni for months.
Therefore,
the reasonable conclusion to draw from Descalzi’s letter is that he does not
dispute any other aspects of the article including his reported claim that
Scaroni who had amassed millions and possibly billions during his time at the
helm of Eni was a longstanding associate of the unscrupulous ex-convict
Bisignani. Descalzi would also appear to agree that despite Eni and Scaroni’s
claims to the contrary, Eni did use middlemen in its efforts to acquire OPL
245.
One Luigi
Zingales, an independent member of the Eni board would also appear to have
joined in the fight and royal rumble. This is because in the wake of the
revelations about Descalzi being under investigation, the Italian Prime
Minister Matteo Renzi who removed Scaroni and installed Descalzi jumped to
Descalzi’s defence.
The La
Repubblica article also revealed that Zingales deemed Renzi’s actions to be
“reckless” and considered resigning in protest but was prevailed upon to
remain. This would suggest that Descalzi does not enjoy the full support of the
Eni board and shareholders.
The
apparent disaffection amongst shareholders and board members is likely to grow
as the seriousness of the allegations and the weight of the evidence against
Descalzi and Eni begins to crystallise the prospect of severe sanctions across
multiple jurisdictions including the US where Eni is registered with the SEC
and Nigeria where the House of Representatives has called for the licence to be
revoked.
The Eni
board and shareholders will be acutely aware that Eni’s interests may be better
served by getting rid of the indicted officials and coming clean with the
investigating authorities in order to mitigate any possible sanctions.
While the
main protagonists are busy fighting and rolling around in the roforofo who will
tell them that they are gradually becoming indistinguishable from one another.
It would appear that one or more of them are on the verge of giving up the
fight to negotiate a deal as a witness for the prosecution. The odds would be
on the tearful Descalzi to turn first.
As the
Italian combatants begin to spread the fight further and wider, who will
protect the Nigerian Presidency from the mud that is being flung from Italy and
elsewhere as a result of the murky deal that the Attorney General and the Oil
Minister made?
[1] “Eni
says no intermediary used to obtain licence award in Nigeria Paolo Scaroni not
involved in any way regarding the inquiry on Wind”, ENI, 24 June 2011,
[2] “La
rabbia di Descalzi: "Non ho mai preso soldi, in Nigeria decise
Scaroni", 21 September 2014, La Repubblica available at http://www.repubblica.it/economia/2014/09/21/news/la_rabbia_di_descalzi-96313391/
[3] “Eni, Bisignani: “Descalzi? Da lui lacrime di
coccodrillo, deve tutto a Scaroni”, 22 September 2014, Il Fatto Quotidiano,
available at
No comments:
Post a Comment