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

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. 

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)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.

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

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