Italian boss to stand trial with ex-CEO Scaroni over $1.3bn Nigerian oil transaction

February 10, 2017
Source: thebftonline.com/Ghana
Italian boss to stand trial with ex-CEO Scaroni over $1.3bn Nigerian oil transaction

Claudio Descalzi, chief executive of Eni, has suffered a setback after Italian prosecutors charged him with international corruption following a lengthy investigation into the Italian energy group’s 2011 purchase of a Nigerian exploration licence.

Mr Descalzi was asked to stand trial along with Paolo Scaroni, the former chief executive of Eni, as well as nine other individuals who were involved in the $1.3bn transaction, according to Fabio De Pasquale, the lead prosecutor on the case. Eni and Royal Dutch Shell, which jointly owns the licence, have also been charged as companies, he said.

The move by prosecutors in Milan comes at an awkward time for Mr Descalzi, who is hoping to be reappointed as chief executive of Eni by the Italian government when his term expires later this year.

The case also adds to the judicial travails of top managers of Italy’s leading state-controlled companies: last week, Mauro Moretti, chief executive of Leonardo, the Italian defence group, was sentenced to seven years in jail in connection with his role in a 2009 rail disaster, although he is likely to appeal.

Mr Descalzi was notified that he was under investigation in the Nigerian case in September 2014, shortly after he was appointed to the job by Matteo Renzi, the former prime minister. He has consistently maintained his innocence.

In a statement, Eni’s board expressed its “full confidence” in Mr Descalzi. An Eni spokeswoman said she wanted to “reiterate the propriety” of the deal. She added that an independent probe by a US law firm hired by Eni to examine the agreement had found that the purchase of the licence had “respected the existing laws”.

Eni has not yet been notified that Mr Descalzi has been charged. A judge will have to sign off on the prosecutors’ request for a trial in the coming months.

The investigation focuses on an offshore exploration bloc called OPL 245, which is estimated to contain up to 9bn barrels of oil and is considered one of Nigeria’s most highly-prized energy prospects.

Along with the investigation in Italy, the deal has also attracted scrutiny in Nigeria: a court in the west African nation ordered Eni and Shell to forfeit the licence temporarily, pending an inquiry by the country’s own anti-corruption agency.

The main accusation is that Eni and Shell knew the money paid to the government for OPL 245 would then be funnelled to other Nigerian individuals, essentially as bribes.

But Eni and Shell have said that they simply transferred money to the Nigerian government, without making any arrangements with third parties or the ultimate beneficiaries.

At Eni, Mr Descalzi has been credited with shepherding the company through the recent low oil price environment and securing big exploration successes, such as the discovery of a giant gasfield off the coast of Egypt called Zohr. Eni recently cashed in on Zohr by selling stakes in the project to BP and Rosneft.

Shell declined to comment. People briefed on the matter said Shell had not so far received an indictment from Italian prosecutors. Mr Scaroni and Mr Descalzi could not immediately be reached for comment.

Credit: Financial Times