Shell says it knew some payments for Nigeria oilfield would go to Malabu

By Libby George

LONDON (Reuters) – Royal Dutch Shell <RDSa.L> has said it knew that some of the payments it made to Nigeria for the rights to an oilfield would go to Malabu Oil and Gas, a company associated with a former Nigerian oil minister and convicted money launderer.

Shell spokesman Andy Norman said the group had known the Nigerian government “would compensate Malabu to settle its claim on the block”. Shell previously had said only that its payments from the 2011 deal went to the Nigerian government.

In an email to Reuters, Norman said that while Shell knew that former oil minister Dan Etete was “involved” with Malabu, it had not confirmed that he controlled the company.

Etete was convicted of money laundering in a separate case in France in 2007.

Attempts by Reuters to contact Etete have been unsuccessful.

“Over time it became clear to us that Etete was involved in Malabu and that the only way to resolve the impasse through a negotiated settlement was to engage with Etete and Malabu, whether we liked it or not,” Norman said.

Norman added that the company believes the settlement was a fully legal transaction with the Nigerian government.

The statement comes amid mounting pressure over the deal, in which Shell and Italy’s Eni <ENI.MI> paid $1.3 billion (1.04 billion pounds) for the rights to offshore block OPL 245, which industry estimates say could hold more than 9 billion barrels of oil.

Courts in Nigeria and Italy are investigating the purchase of the block. Italian prosecutors have asked for Eni chief Claudio Descalzi to be sent to trial in correction with the case. Eni has said neither the company nor Descalzi were involved in any allegedly illicit conduct.

A Nigerian court ordered the asset temporarily seized in January at the request of the country’s Economic and Financial Crimes Commission, but the move was overturned.

(Additional reporting by Alexis Akwagyiram in Lagos, Stephen Jewkes in Milan and Karolin Schaps in London; Editing by Dale Hudson)

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