Shell in ‘one of the biggest corruption scandals in history’

Shell in ‘one of the biggest corruption scandals in history’

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SHELL in Nigeria has been accused of being involved in ‘one of the largest corruption scandals in history’ following the revelation of emails that showed ‘the world’s fifth biggest company took part in a scheme which deprived Nigeria and its people of $1.1 billion in a murky deal for access to one of Africa’s most valuable oil blocks, known as OPL 245.’

The emails were discovered by Global Witness and Finance Uncovered, and a report was published by the two global anti-corruption watchdogs. Global Witness said: ‘For years, Shell has denied it did anything wrong, but today’s emails show they knew the money would be diverted to private hands, and they went ahead with the deal anyway.

‘This is devastating for the people of Nigeria. Right now five million of them face starvation. The money paid for the block equates to one and a half times what the UN says is needed to respond to the current famine crisis. But the Nigerian people saw none of the benefits,’ Global Witness added.

The emails showed that senior Shell executives ‘knew the massive payment for the oil block would go to Dan Etete – a convicted money launderer and former Nigerian oil minister.’ Global Witness said that Etete spent some of the backhander he received from Shell on a private jet, armoured cars, and shotguns.

‘The emails also show Shell’s top brass were told that money was likely to flow to some of the most powerful people in the country, including then President Goodluck Jonathan,’ Global Witness said. ‘Shell portrays itself as an oil company that does good.

‘Yet our investigation reveals a story of hypocrisy and deception, and finds the company’s most senior bosses depriving Nigeria of life-saving funds by going ahead with a dodgy deal that they knew was a vast bribery scheme. It’s one of the biggest corruption scandals in the history of the oil sector.’

The exposure was made just before the 6th Tana Forum on Peace and Security in Africa, in Bahir Dar in Ethiopia, which focused on natural resource governance in Africa. Participants at the Forum called for the continent to come up with systems free from rent seeking behaviours in order for countries to have the full benefit of natural resources, adding that ‘transparency, and accountability should be institutionalised across all stages of natural resource management and governance.’

The role of non-governmental organisations (NGOs) in helping to police natural resource extraction in Africa was acknowledged by the Tana Forum, which called on them to ‘provide the necessary checks and balance…[and]to ensure the promotion of the rule of law and accountability.’

The Shell report comes in the midst of President Muhammadu Buhari’s much-vaunted fight against corruption, which he launched as soon as he came to power in 2015. It has been a tough battle, with critics accusing him of targeting political opponents.

In the Shell case, it seems that the company had not only short-changed Nigerians but its shareholders also, according to Global Witness. When Shell sold its drilling lease in the troubled Niger Delta to Nigerian Benedict Peters and his company Aiteo, the oil giant was lifting 23,000 barrels a day but Aiteo has been able to reach output of 90,000 barrels a day.

Aiteo’s success is in line with the Nigerian government’s long-held position of encouraging local companies to take charge of oil drilling, although indigenisation of the sector has not been at the stage that the government would like to see it.

However, Peters, speaking to journalists recently, was quite upbeat about the prospects for his company, which he said would, with new sites, increase production to 150,000 barrels of oil a day and 5.6 million cubic metres of gas daily. ‘We have shown by our story that indigenous oil companies are competent,’ he said. This would create ‘a transformed energy sector that creates wellness and economic prosperity.’

Over the years, various Nigeria governments spent some $10bn buying back oilfields as the country tried to take control of its natural assets. Peters, who borrowed heavily from local banks to buy the Niger Delta lease, has been critical of the country’s dependence on oil without the backing of a strong local industry. He is in favour of diversification of the economy so that when the price of oil drops it does not adversely affect the country’s socio-economic fabric.

Buhari’s war against corruption appears to be having some effect on the discredited oil sector, as output by locally-owned companies has increased, which, in turn, has seen some improvement to the country’s economy. But there is some concern about the manner in which the administration is carrying out the anti-corruption campaign. Many point out that it is targeting perceived political opponents and someone like Benedict Peters who has shown no interest in politics. This could impede economic growth and dissuade local businessmen such as Peters to invest in the oil industry, critics say.

 

 

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