Trial continued in an Italian court on Wednesday over the controversial $1.3 billion OPL 245 deal between Shell, Eni-Agip and Malabu in 2011, with a star witness alleging that Eni-Agip officials knew that bribes would paid to Nigerian politicians.
Vincenzo Armanna, former Eni manager and defendant in the corruption trial, also informed the court that Mohammed Bello Adoke, former Nigerian attorney-general, told Eni officials that they were at the risk of being arrested because they were negotiating kickbacks.
The defendant said there were suspicions and unease over the involvement of Emeka Obi in the negotiations. Obi has since been jailed for corruption in the OPL 245 affair.
Armanna is accused of having benefited from alleged kickbacks from the deal, although he said the $1.2 million he collected from Bayo Ojo, the former Nigerian attorney-general, was an “inheritance”.
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Ojo was the attorney-general when the federal government reached an out-of-court settlement with Malabu in 2006 and agreed to return the oil block to the Nigerian company.
Meanwhile, Fabio De Pasquale, the Italian prosecutor, also told the court in Milan on Wednesday that Eni tried to “tamper” with Armanna to withdraw some statements he made during investigations.
THE OPL 245 SAGA
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In 1998, the federal military government awarded OPL 245 to Malabu Oil and Gas Ltd, which was said to be owned mainly by Mohammed Abacha, son of the Sani Abacha, and Dan Etete, who was the petroleum minister at the time.
In 2001, President Olusegun Obasanjo revoked Malabu’s licence and assigned the oil block to Shell — without a public bid. Malabu went to court, and ownership was reverted to it in 2006 after it reached an out-of-court settlement with the federal government.
Shell fought back and commenced arbitration against Nigeria, but when President Goodluck Jonathan came to power in 2010, the controversy appeared to have been resolved with Shell and Eni agreeing to buy the oil block from Malabu for $1.1 billion.
The oil companies also paid $210 million as signature bonus to the federal government of Nigeria.
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Both payments were made to the federal government account at JP Morgan, London, from where Malabu’s share was transferred to Nigerian bank accounts of Abubakar Aliyu, owner of AA Oil Ltd.
However, investigators are trying to establish that the bulk of the payment to Malabu was distributed as kickbacks and that the IOCs were in the know of the alleged sleaze — a charge they denied.
WEDNESDAY’S PROCEEDINGS
Barnaby Pace, a campaigner with London-based Global Witness which has been working on the OPL 245 deal for a decade, tweeted Armanna’s testimony in court.
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Here are the highlights of his tweets.
2/ Armanna is both an accuser of Eni’s current and former CEOs (both defendants in the case) and is also accused of receiving part of the alleged kickbacks from OPL 245. Armanna received $1.2m from Bayo Ojo, the former Nigerian Attorney General. He says it was an inheritance.
Advertisement— Barnaby Pace (@pace_nik) July 17, 2019
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3/ Prosecutors allege in court filings that Armanna had links with Dan Etete, attended negotiations with former Attorney General Mohamed Adoke and “was fully aware of the destination of a large part of the sums paid by ENI to political sponsors of the operation”
— Barnaby Pace (@pace_nik) July 17, 2019
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4/ Prosecutors also allege Armanna co-ordinated with fellow defendant, Italian businessman and former Italian Envoy Gianfranco Falcioni and former Nigerian AG Bajo Oyo the failed transfers of the $1.1bn through Swiss and Lebanese banks then into Nigeria.
— Barnaby Pace (@pace_nik) July 17, 2019
6/ New evidence has been submitted into the trial. Eni’s former external lawyer Piero Amara has publicly accused Eni’s new head of Legal Affairs of trying to “neutralize” Armanna’s statements because they saw Descalzi as likely to be convicted. https://t.co/t3e54DCILu
— Barnaby Pace (@pace_nik) July 17, 2019
17/ Armanna says he was brought into OPL 245 discussion as the only Eni senior manager in Nigeria and someone was needed to meet Dan Etete.
— Barnaby Pace (@pace_nik) July 17, 2019
18/ Armanna says he related often to Chief Akinmade, a former head of Eni in Nigeria who knew Etete very well. In contrast the middleman Emeka Obi had no record in the oil industry.
— Barnaby Pace (@pace_nik) July 17, 2019
19/ Obi’s role was not clear, He did not have a clear mandate, when he presented a mandate it was signed by Etete who had no formal role in Malabu.
— Barnaby Pace (@pace_nik) July 17, 2019
20/ Armanna says the middleman Obi’s companies were strange, he changed which one he used but they were both empty. They wouldn’t pass Eni’s due diligence, all people involved would have to be identified and this wasn’t possible.
— Barnaby Pace (@pace_nik) July 17, 2019
22/ Armanna says Obi sent a letter to Eni at Christmas asking to negotiate through him for OPL 245. Normally Eni takes at least a week to respond, all different departments like legal have to feed in and this was at Christmas. Despite the problems Obi got a response within hours.
— Barnaby Pace (@pace_nik) July 17, 2019
23/ Armanna says Eni saw the OPL 245 block as a lifeline, big oil reserves, offshore reducing security risks. Eni was close to shutting down Eni Nigeria, other companies like Shell were selling their assets
— Barnaby Pace (@pace_nik) July 17, 2019
25/ Armanna went with Obi to meet Etete his house in Lagos. The compound was massive and very luxurious with Elephant tusks in the house. The meeting went badly. Etete wanted to know who Obi was, why he was there, why he had to be paid $200m, that Eni should pay him instead.
— Barnaby Pace (@pace_nik) July 17, 2019
26/ Armanna says Etete spoke of a relationship with Descalzi and Casula, senior managers at Eni. He later learned that Descalzi had earlier had dinner with Etete, Obi and Ageav in Milan. This was a problem as it implied approval of Obi and a start of negotiations.
— Barnaby Pace (@pace_nik) July 17, 2019
27/ Armanna says it was also a problem to meet Etete, even meeting a person convicted of money laundering is against Eni’s rules.
— Barnaby Pace (@pace_nik) July 17, 2019
28/ Armanna says the meeting with Etete was the first time he was hearing about a $200m payment to Obi. Armanna says he raised this with his boss, Roberto Casula. He says Casula said Obi was being imposed by the then Eni CEO Paolo Scaroni.
— Barnaby Pace (@pace_nik) July 17, 2019
29/ Armanna says $200m was a lot for any middleman, Eni’s valuation of the block at the time was around $2bn so 10%, that it was a lot compared to 2-3% which he says is the normal range for the industry.
— Barnaby Pace (@pace_nik) July 17, 2019
30/ Armanna says Agaev, the other middleman was very well known and respected, close to both President Jonathan and Obasanjo. One of the most influential Russian oil lobbyists in the world. Agaev was paying the expenses of Etete.
— Barnaby Pace (@pace_nik) July 17, 2019
31/ Armanna explains that Etete was often referred to as “The fat man”, Jonathan as “Fortunato” and Diezani Alison Madueke as “La Senora” and the project to buy OPL 245 was called “Clear Vision”.
— Barnaby Pace (@pace_nik) July 17, 2019
32/ Armanna says the homes of his fellow Eni managers were being paid for by Falcioni, one of the other defendants, an honorary consul to Nigeria for Italy, he was a trusted man. Maintenance was handled by the embassy who were worried about security, confidentiality and bugging.
— Barnaby Pace (@pace_nik) July 17, 2019
33/ Armanna says that the $200m fee for Obi was well known in Nigeria. The Attorney General Adoke told them the amount was too high. At a meeting at Casula’s house Shell manager Peter Robinson and general counsel Nike Olafimihan said the payment could blow the deal.
— Barnaby Pace (@pace_nik) July 17, 2019
34/ Armanna says the Shell managers said the $200m payment could get people arrested, it could count as bribes to Italian public officials, that Eni should pay the money separately or take it out entirely. Shell didn’t want to pay anything to Obi.
— Barnaby Pace (@pace_nik) July 17, 2019
37/ Armanna says Descalzi met Goodluck Jonathan to ensure there was approval that Eni would buy OPL 245. Initially other ministers were present but when they were alone Descalzi asked Jonathan about Obi, it was very unusual to mention a middleman with a President.
— Barnaby Pace (@pace_nik) July 17, 2019
38/ Armanna says that the Attorney General Adoke and General Gusau dropped their support for Obi, Diezani Alison Maduke then isolated dropped her support for him.
— Barnaby Pace (@pace_nik) July 17, 2019
39/ Armanna explains that Eni’s then CEO Scaroni met Jonathan later in 2010. This was less about the deal but more about providing an endorsement of Jonathan ahead of the elections. Scaroni was influential both because of his role at Eni and in international finance.
— Barnaby Pace (@pace_nik) July 17, 2019
40/ Armanna says that it was unusual for the Attorney General to manage the negotiations. The oil minister and President would normally make the decisions. NNPC and DPR were also involved and opposed the deal, didn’t want money going to Malabu.
— Barnaby Pace (@pace_nik) July 17, 2019
41/ Armanna says Descalzi seemed very concerned that Scaroni’s friend and Obi’s backer, Luigi Bisignani, who was very politically influential would run a media campaign against him to try to prevent him becoming the next Eni CEO.
— Barnaby Pace (@pace_nik) July 17, 2019
43/ Armanna explains that in October 2010 Eni offered to buy 100% of OPL 245 for $1.26bn direct from Malabu. Eni would pay $980m and Shell the signature bonus. The Nigerian government had already been involved to agree the fiscal terms. Etete refused the deal.
— Barnaby Pace (@pace_nik) July 17, 2019
45/ Armanna says they dined at Casula’s with Eni & Shell managers. They knew Obi was the reason Etete refused the deal. The discussed offering an extra $40m with Shell money so Etete could pay Obi. Shell weren’t happy but they were told it was damage control for Etete forget Obi
— Barnaby Pace (@pace_nik) July 17, 2019
46/ Armanna says he met Bisignani in Italy. Trying to understand if the $200m had come from Scaroni, Armanna says he handwrote in pen a note on the issue but only wrote in pencil the number $200m, rubbing it out. He’s pressed by the judge on why he didn’t mention this before.
— Barnaby Pace (@pace_nik) July 17, 2019
48/ Armanna says Adoke eventually left the office and convinced Etete to accept the higher $1.3bn offer though they still had issues with Malabu’s rights to OPL 245, Malabu’s right to the OPL 245 license was questionable and they never passed the due diligence.
— Barnaby Pace (@pace_nik) July 17, 2019
49/ Armanna says the meeting when they agreed the price Aliyu Abubakar and Munamuna was present. They didn’t speak but nodded at the price to the AG who paid attention to them. Only Peter Robinson seemed familiar with them.
— Barnaby Pace (@pace_nik) July 17, 2019
50/ Armanna says the negotiations were all video taped. Later Adoke’s assistant played back a video of Casula agreeing to some terms when they were dealing with details later.
— Barnaby Pace (@pace_nik) July 17, 2019
51/ Armanna says Obi was cut out of the negotiations. They though Etete would just pay him $40m but he didn’t know about Obi’s later meetings in Milan or with Etete.
— Barnaby Pace (@pace_nik) July 17, 2019
53/ Armanna says Obi told him half his fee was for Diezani Alison Madueke who he called aunty but he didn’t believe him. When Obi was cut out the Nigerians didn’t complain. It was the Italians who put him in. Casula and Descalzi told Armanna it came from Scaroni.
— Barnaby Pace (@pace_nik) July 17, 2019
57/ Armanna says it March-April 2011 there were several issues to resolve. The tax terms as Eni and Shell were buying the block on different fiscal terms. Tax treatment of the sale and where to pay the money as they thought Malabu couldn’t open an account.
— Barnaby Pace (@pace_nik) July 17, 2019
58/ Armanna says the agreement was crafted so it was the Nigerian government who had to say where the money would go and to what account.
— Barnaby Pace (@pace_nik) July 17, 2019
59/ Armanna says it was clear to everyone Etete would get over $1bn. There was no doubt the money was going to Malabu.
— Barnaby Pace (@pace_nik) July 17, 2019
60/ The prosecutor says that Eni’s legal officer denied knowing the money would go to Etete. Armanna says they all knew as they drafted the agreements including the escrow agreement which mentioned Malabu. Armanna says Descalzi also knew.
— Barnaby Pace (@pace_nik) July 17, 2019
61/ Armanna says that it was an explicit request by Eni, rather than Shell, to filter the money through the Nigerian Government so that if asked by the media they could say they paid the Government not Malabu.
— Barnaby Pace (@pace_nik) July 17, 2019
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