Scandal-Plagued Oil Deal Could Cost Nigeria $6b: Experts

Published: 26 November 2018


New expert analysis projects that Nigeria could lose up to $6 billion in revenue from a scandal-plagued oil deal with energy giants Shell and Eni. (Photo: Uwe Aranas, CC BY-SA 3.0)

By Lydia Osborne

A deal between Nigeria and the international oil giants Shell and Eni could end up costing the West African country an estimated US$ 6 billion in lost revenue, the anti-corruption campaign group Global Witness said Monday.

That figure was reached as part of an expert analysis commissioned by the group into the deal for Oil Prospecting Licence (OPL) 245, a controversial concession in the Niger Delta that is at the center of an ongoing criminal corruption case in Italy.

Prosecutors in Italy allege that much of the more than $1 billion payment made for the oil block in 2011 ended up going as bribes to Nigerian officials. Both the Italian Eni and the British-Dutch Shell are accused of knowingly taking part in bribery. They deny any wrongdoing.

Now, the new report by Global Witness finds the deal itself ended up seeing Nigeria being paid a far lower percentage of the profits from the block than is considered fair under international standards.  

“The $6 billion in revenue that the companies are set to deprive the Nigerian people of is equivalent to twice the country’s annual health and education budget, or enough to train six million teachers,” the group said.

“Instead, we could see that money boosting profits for the European oil giants.”

Despite its wealth, oil-rich Nigera has the highest number of people on Earth living in extreme poverty.  

Global Witness last year released emails that they claim show that Shell knew much of the money initially paid for the oil block would be passed to Dan Etete, a convicted money launderer and former Nigerian oil minister, and would be used to bribe Nigerian officials.

“Etete can smell the money," a Shell senior business advisor, Guy Colegate, wrote in one uncovered email, the Independent reported.

“If, at nearly 70 years old he does turn his nose up at 1.2 bill he is completely certifiable and we should then probably hold out until nature takes its course with him. But think he knows its his for the taking.”

However, Shell has remained steadfast in its public denials.

"We maintain that the settlement was a fully legal transaction and we believe the trial judges in Italy will conclude that there is no case against Shell or its former employees," Shell said in a statement to BBC.