The court filing alleges that the companies paid a bribe of $801 million to the former Oil Minister of Nigeria, Dan Etete and his allies for the purchase of Oil Prospecting License (OPL) 245. The government received only $210 million from the deal. The Nigerian Court has seized the oilfield assets from the companies and ordered the transfer of oil blocs to the government.

The Inside Story

OPL 245 is considered to be one of the richest oil blocs in Nigeria comprising over nine billion barrels of crude oil. Former Nigerian President, Goodluck Jonathan had handed over OPL 245 to Malabu Oil, a company with questionable credentials secretly established by Dan Etete. Since Malabu Oil was thought to be a fraudulent company, Etete decided to cash in on the bloc.

Through various middlemen, Shell and Eni were asked to purchase the bloc. Due to Etete’s scandalous records, former Justice Minister Adoke became the mediator for the transaction.

The companies denied of being involved in the crime and claimed that the money was paid into the Nigerian government account. Various investigations however, reveal that the companies were guilty. Several senior executives of both the companies have faced a trial over these corruption allegations.

About Royal Dutch Shell

Headquartered in Netherlands, Shell is one of the largest integrated energy companies, engaged in the production, refining, distribution and marketing of oil and natural gas. The company carries a Zacks Rank #2 (Buy).

Shell has outperformed the Zacks categorized Oil & Gas-International integrated industry over the prior three months. During the aforesaid period, the company’s shares fell 0.5% while the broader industry declined around 1.5%.

About Eni SpA

Based in Rome, Italy, Eni’s major business segments are Exploration and Production (E&P), Gas and Power, and Refining and Marketing. The company presently carries a Zacks Rank #2.

Over the last three months, shares of Eni rallied 5.5% compared to the 1% drop witnessed by the Zacks categorized Oil & Gas International Integrated industry.