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Nigerian govt demands $1.1bn damages in advance from Shell, Eni in Malabu scandal

The Nigerian government has requested a court sitting in Milan, Italy to order oil supermajors, Shell and Eni, to pay the sum of $1.092 billion as an immediate advance payment for damages in the Malabu oil scandal regarded as one of the oil industry’s biggest-ever corruption scandals, Reuters reported on Wednesday.

During a hearing on Wednesday into alleged corruption involving Shell and Eni’s 2011 acquisition of the Oil Prospecting Lease (OPL) 245 field, lawyer for the Nigerian government, Lucio Lucia, demanded a guilty verdict and an advance payment, ahead of any larger damages package set by a court at a later date.

The lawyer did not disclose the amount Nigeria was generally seeking as damages but mentioned the deal, which has been the subject of a prolonged litigation, had denied Nigeria of “profit oil,” going further to say “these are massive amounts.”

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

The long-standing bribery lawsuit involves the purchase of the OPL 245 offshore field, situated about 150 kilometres off the Niger-Delta, for around $1.3 billion from Malabu, a firm owned by Nigeria’s one-time minister of oil, Dan Etete.

Prosecutors claim roughly $1.1 billion of that sum was transferred to middlemen and politicians and half of it Mr Etete himself.

According to Shell, the 2011 pact was a settlement of an enduring case after the block was previously allocated to Malabu and Shell by the Nigerian government.

Etete, Shell, Eni and the managers accused in the Milan court case including Eni’s chief, Claudio Descalzi, have all claimed innocence of any wrongdoing.

In a statement on Wednesday, Eni said the acquisition price for OPL 245 was “congruous and reasonable” given the field’s worth and investment required to bring it into production.

Prosecutors in July asked for Shell and Eni to be fined and some of their former and present executives, including Descalzi, to be jailed.

Similarly, they demanded the seizure of a total of $1.092 billion from all the defendants in the case, equal to the bribes said to have been paid.

Attention will now shift to the next trial in the hearing, timed to hold on 21st September, when the defence is expected to present its case.

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