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    Thursday, September 10, 2020

    Malabu: Eni Rejects Nigeria’s Demands for Upfront Payment of $1.1bn

    Italian oil giant Eni, has rejected Nigeria’s demand for an upfront payment of $1.092 billion from damages it suffered over OPL 245 oil block.

    Nigeria had on Wednesday demanded an upfront payment of $1.092 billion from Royal Dutch Shell and Eni in damages it suffered over OPL 245 oil block.

    At a hearing into alleged corruption linked to Eni and Shell’s 2011 acquisition of the OPL 245 field, Lucio Lucia, lawyer for the Nigerian government, called for a guilty verdict and an advance payment, ahead of any broader damages package set by a court at a later date.

    But Eni, in a statement, said with regard to the indictment issued today by the Nigerian civil party, it was highly disappointed that the prosecutors continue to use as evidence flows of money which occurred after the Company paid for the OPL 245 license, in order to support its accusations of corruption against the company.

    The company said payment for OPL 245 was made directly to the Nigerian government, in a clear, linear and transparent manner using an internationally-renowned bank, adding that Eni was not aware, and was in no way required to be aware, of any flows of funds following its direct payment.

    “The civil party wrongfully presents a negotiation between Eni and Shell on one side and Nigerian government representatives on the other as illicit, alleging that the two companies were aware of unlawful intentions of the Government representatives.

    “Eni maintains that it acted lawfully, dealing with the Ministries of a sovereign government, traditionally competent with respect to operations such as these, acting properly in negotiations of this complexity through transversal, complex and proven processes for evaluation and analysis.

    “In relation to the civil party’s suggestions that the price paid materially undervalues the license, Eni emphasizes that the economic offer was congruous and reasonable when considering the value of the OPL245 exploration field and the investments necessary to be able to put it into production,” the statement said.

    It added that the final amount paid by Eni to the Nigerian government was agreed by the parties following an in-depth geological, technical and economic examination, stressing that it also considered the historical evolution of the Nigerian and international oil markets.

    “Suffice it to consider, for example, that at the end of September 2011 the Brent was valued over 100 dollars, while today it is around 40 dollars.

    “Moreover, the transaction price of $1.09 billion dollars, net of the signature bonus, equals the assessment of OPL 245 made by IHS for Shell in its 2009 arbitration against the Federal Government of Nigeria, when the British/Dutch company had no interest whatsoever in underestimating the asset to which it was laying claim,” the statement said.

    Earlier, Lucia had said that calculated under two different scenarios, the profits that had been lost amounted to $4.5 billion and $5.9 billion respectively.

    The long-running bribery case revolves around the purchase of the OPL 245 offshore field, some 150 km off the Niger Delta, for about $1.3 billion from Malabu, a company owned by former Nigerian oil minister Dan Etete.

    Prosecutors allege that about $1.1 billion of that was siphoned off to politicians and middlemen, half of it to Etete himself.

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