ENI’s Victory in Milan Creates Two Conflicting Reactions in Abuja

There were two contradictory reactions to the ruling, by an Italian court in Milan, that ENI’s CEO Claudio Descalzi and members of his management had no case to answer for the payment the company made to acquire its stake in the Oil Prospecting Lease (OPL 245), ten years ago.

The case had run in the Milan court for three years and Mr. Descalzi, who has been ENI’s CEO since May 2014, and is on course of being the longest serving head of the company in 30 years, faced certain prospect of a jail term.

At the headquarters of Nigerian Agip, ENI’s local subsidiary in Abuja, “it was a huge relief, a big burden lifted off our backs”, company staff say.  ‘We were in the middle of preparation for a meeting with NNPC (on a different subject) to hold the following day (after the March 17 2021 ruling), and we knew that the ruling would drive positive sentiments in our favour”.

The Nigerian government responded differently, at least from the tone of its statement. “The Federal Republic of Nigeria is disappointed in today’s ruling in Milan”, it said on March 17, “but thanks the Italian prosecuting authorities for their tireless efforts.”

The country’s Economic and Financial Crimes Commission (EFCC) has maintained, in the Nigerian court system, “that a fraudulent settlement and resolution came under (President Goodluck) Jonathan’s government with Shell and ENI buying the oil block from Malabu in the sum of $1.1Billion”. It said its Investigations into the deal “revealed crimes that border on conspiracy, forgery of bank documents, bribery, corruption and money laundering, to the tune of over $1.2Billon against   Malabo Oil and Gas Ltd, Shell Nigeria Ultra deep (SNUD) Nigeria Agip Exploration (NAE) and their officials”.

As recently as January 28, 2021, the anti-graft agency was in a Federal High Court in Abuja, to continue its case against Bello Adoke, the Attorney-General of the Federation (AGF) under Goodluck Jonathan; Aliyu Abubakar, described as “an oil magnate”;  Rasky Gbinigie; Malabu Oil and Gas Limited; Nigeria Agip Exploration Limited; Shell Nigeria Extra Deep Limited and Shell Nigeria Exploration Production Company Limited.Commission (EFCC) “with a 42 -count criminal charges) on the OPL 245, otherwise known as Malabu Oil case”.

The EFCC did not respond to request to questions on its response to the Milan ruling, but it could be said that the Nigerian government’s statement covers for it.

At the Nigerian Agip headquarters in Abuja, however, the sense is that it is easier now to focus on the Zabazaba-Etan twin deepwater field development aimed at monetizing reservoirs located in 1,500 and 2,000metres below the seabed. Although AngloDutch Shell is a 50% partner, ENI is the operator.

Front end activities had been completed. EPC contractors were in view and the local content part of the development was being cleared when the Milan case increased the heat. In Nigeria, even as EFCC was going to court, other government agencies were going ahead with approvals for the project, a situation that suggested a lack of unity in vision.

The Field Development Plan calls for conversion of a Very Large Crude Carrier (VLCC) to a Floating Production Storage and Offloading (FPSO). Recoverable reserves for the two fields combined are in the region of 500Million barrels.

ENI has insisted on its innocence, both in court and in public. “During its indictment, in the absence of any evidence or tangible reference to the contents of the trial investigation, the (Milanese) Public Prosecutor has told a story based on suggestions and deductions as already developed during the investigation. This narrative ignores both the witnesses and the files presented within the two years long and more than 40 hearings proceeding, that have decisively denied the prosecutorial hypothesis”.

Descalzi joined ENI in 1981 as a young reservoir engineer. His career took off in 1994, when he was appointed Managing Director of the company’s subsidiary in Congo. Four years later he was Vice President & Managing Director of NAOC, a subsidiary of ENI in Nigeria. From 2000 to 2001 he held the position of Executive Vice President for Africa, Middle East and China. From 2002 to 2005 he was Executive Vice President for Italy, Africa, Middle East, covering also the role of member of the board of several ENI subsidiaries in the area. In 2005, he was appointed Deputy Chief Operating Officer of the Exploration & Production Division in ENI. From 2006 to 2014 he was President of Assomineraria and from 2008 to 2014 he was Chief Operating Officer in the Exploration & Production Division of ENI. From 2010 to 2014 he held the position of Chairman of ENI UK.



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