Earlier in the day, Dutch investigators paid an unexpected visit to Shell’s headquarters in The Hague in connection with a $1.3bn deal in 2011 involving a Nigerian oil licence called OPL 245.
“Apparently they have been in my office for about three or four hours going through everything,” Mr van Beurden told his colleague, in a call tapped by Dutch authorities and leaked to news organisations this week.
“I have nothing on OPL 245, but anyway they managed to take one folder which they thought was of relevance . . . and apparently they have been in your office.” The raid by investigators from the Dutch Financial Intelligence and Investigation Service and the public prosecutor’s office was the latest twist in a near two-decade saga since the rights to OPL 245 — one of Africa’s biggest undeveloped oil blocks — were awarded to a company, Malabu, allegedly controlled by Dan Etete, Nigeria’s then-petroleum minister.
Shell’s subsequent investment in the asset, together with Eni of Italy, allegedly delivered a financial windfall for Mr Etete and associates, triggering bribery investigations in Nigeria and Italy as well as the Netherlands. Anti-corruption campaigners have seized on the case as an example of how Nigerian rulers have allegedly conspired with multinational companies to plunder the country’s oil riches at the expense of ordinary citizens.
Having run Shell’s downstream refining and marketing business before becoming chief executive in 2014, Mr van Beurden was not involved in the 2011 deal under which the Anglo-Dutch group and Eni each acquired a 50 per cent share of OPL 245, an offshore field estimated to contain 9bn barrels of oil. However, it is now his responsibility to deal with the potentially costly fallout.
In the intercepted phone call with Mr Henry, Mr van Beurden acknowledged Shell’s own investigation uncovered “unhelpful” and “stupid” email exchanges among former UK intelligence agents hired by the company to help negotiate the OPL 245 deal. “There was apparently some loose chatter between . . . people we hired from MI6, who . . . must have said things like, ‘Wonder who gets a pay-off here?’”
Mr van Beurden went on to discuss with Mr Henry potential repercussions for Shell in the US, where the company was bound by a deferred prosecution agreement with the Department of Justice in relation to a separate Nigerian corruption case. Shell would have to decide whether to declare it had done nothing wrong in connection with OPL 245, said Mr van Beurden, or instead acknowledge that “we should have maybe at the time been more open with the DoJ than we now find we have been”.
A trove of internal Shell emails seen by the Financial Times and dated between 2008 and 2010 leave no doubt that senior people within the company knew that most of the $1.3bn paid together with Eni for OPL 245 was destined for Malabu, and that much of the money would end up with Mr Etete and associates. Shell had previously said only that the money was paid to a Nigerian government escrow account.
The emails were secured by the anti-corruption groups Global Witness and Finance Uncovered and first reported by BuzzFeed. In some memos, former British spies working for Shell described efforts to cultivate Mr Etete with “lunch and lots of iced champagne”. Mr Etete had served as Nigeria’s petroleum minister between 1995 and 1998, and in 2007 was convicted of money laundering in France in a separate case.
As Shell closed in on the 2011 deal, one former MI6 officer employed by the company said in an email forwarded to then-chief executive Peter Voser that Mr Etete could “smell the money” and that the Nigerian would be “completely certifiable” to turn it down. The same ex-spy alleged in a different memo that Goodluck Jonathan, Nigerian president at the time, had sent a letter to Mr Etete, which was clearly an attempt to deliver “significant revenues” from the deal for the then ruler. Mr Jonathan has repeatedly denied any wrongdoing.
Another Shell memo drawn up for company executives ahead of negotiations with Eni in 2010 said the Nigerian government wanted a deal with Malabu done quickly “driven by expectations about the . . . political contributions that will flow as a consequence”. Shell first acquired a stake in OPL 245 alongside Malabu in 2001.
The Nigerian government subsequently stripped Malabu of the licence but later reinstated the company as 100 per cent owner, triggering a legal fight with Shell. The 2011 deal under which joint ownership passed to Shell and Eni was intended to bring an end to the squabbling but instead only brought more problems.
In a statement, Shell said “that the only way to resolve the impasse” had been “to engage with Etete and Malabu, whether we liked it or not”. “From the complex multi-party negotiations that followed, we knew that the federal government of Nigeria would compensate Malabu to settle its claim on the block. We believe that the settlement was a fully legal transaction with the government.”
Due Diligence Sign up to your daily M&A email briefing Keep up to date on the latest news and insight on deals every weekday morning Shell and Eni are waiting to find out if they will face trial in Italy in relation to OPL 245 after a Milan prosecutor pressed charges against both companies as well as several individuals including Claudio Descalzi, chief executive of the Italian group.
Dutch investigators have been co-operating with their Italian counterparts. Shell said: “We do not believe that there is a basis to prosecute Shell. Furthermore, we are not aware of any evidence to support a case against any former or current Shell employee. “If the evidence ultimately proves that improper payments were made by Malabu or others to then-current government officials . . .
it is Shell’s position that none of those payments were made with its knowledge, authorisation or on its behalf.” Eni and Mr Descalzi said last month they did nothing wrong in relation to the $1.3bn deal. Mr Etete could not be reached for comment.