One of the world’s largest energy companies is facing criminal charges over a deal made back in 2011. Dutch Royal Shell (AMS: RDSA) is facing ‘prosecutable offenses’ from legal authorities in the Netherlands, who are stepping up legal pressure against the energy company over a past Nigerian oil deal estimated at $1.3 billion.
The Dutch Public Prosecutor’s Office informed the company that it is nearing the end of their investigation and are moving toward prosecuting the company. Shell and an Italian oil company Eni were first accused of bribery back in 2017 over a $1.3 billion payment secured from an exploration license for an oil block all the way back in 2011. Although the funds were supposedly paid to the Nigerian government, it turns out that the money went to a company called Malabu Oil and Gas, which has connections with former oil minister Dan Etete.
As it stands, Eni CEO Claudio Descalzi along with four ex-Shell executives are facing internal corruption charges in Italy, who allege these payments were pocketed by individuals rather than going to the Nigerian government. Back in November, one report said the impact of this deal saw the African government lose a further $6 billion in oil revenue that was rightfully theirs.
Although prosecutors have said that resolving the case with a settlement remains a possibility, the affair would still be a significant blemish on the company’s reputation. Currently, prosecutors are deciding how best to prosecute the company between Italian and Dutch courts.
Back in 2016, investigators from the Dutch Financial Intelligence division alongside the public prosecutor’s office raided Shell’s headquarters in The Hague as part of an ongoing investigation. Doton Oloko, a prominent Nigerian anti-corruption manager said at the time that “The age of accountability is dawning with this news. Fueling corruption in Nigeria through shady deals … will now have consequences.”
In response to the news, shares of Royal Dutch Shell stayed relatively the same. For a company as large as Shell, only the largest news announcements will see the businesses stock move any measurable amount.
Dutch Royal Shell Company Profile
The Royal Dutch Shell plc, incorporated on February 5, 2002, explores for crude oil and natural gas around the world, both in conventional fields and from sources, such as tight rock, shale and coal formations. The Company works to develop new crude oil and natural gas supplies from various fields.
The Company’s segments include Integrated Gas, Upstream, Downstream and Corporate. The Integrated Gas segment is engaged in the liquefaction and transportation of gas and the conversion of natural gas to liquids to provide fuels and other products, as well as projects with an integrated activity, ranging from producing to commercializing gas.
The Upstream segment includes the operations of Upstream, which is engaged in the exploration for and extraction of crude oil, natural gas and natural gas liquids, and the marketing and transportation of oil and gas, and Oil Sands, which is engaged in the extraction of bitumen from mined oil sands and conversion into synthetic crude oil. The Downstream segment is engaged in oil products and chemicals manufacturing, and marketing activities. – Reuters