All posts tagged Eni

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

Section: In the news · March 18, 2021 · No comments |

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.

ENI Set to Re-Start the Damietta LNG Plant in Egypt

Section: GAS COMMERCIALISATION · December 1, 2020 · No comments |

By Bunmi Aduloju

Italian player ENI says it has signed a series of agreements with the Egyptian government, two of the country’s state hydrocarbon firms and a Spanish firm, paving the way for the restart of the Damietta liquefaction plant in Egypt by the first quarter of 2021.

The state hydrocarbon firms include the Egyptian General Petroleum Corporation (EGPC) and the Egyptian Natural Gas Holding Company (EGAS). The Spanish company is Naturgy.

The agreements culminate in the amicable settlement of the pending disputes of Union Fenosa Gas and SEGAS with EGAS and Arab Republic of Egypt and the subsequent corporate restructuring of Union Fenosa Gas itself, whose assets will be shared between the partners ENI and Naturgy.

The liquefaction plant’s owner is the company SEGAS, which is 40% owned by ENI through Union Fenosa Gas (50% ENI and 50% Naturgy). The plant has a capacity of 7.56Billion cubic meters per year, but has been idle since November 2012.

The agreements, signed on December 1, 2020, are in line with the ones finalized last February and take into account the evolution of the energy scenario, allow to reinforce ENI’s strategic objectives in terms of growth of its LNG portfolio, in particular in Egypt, where the Company is the main gas producer, and are of primary importance for all parties involved to resolve all pending disputes.

“The operation, subject to the authorization of the European authorities and subject to the fulfilment of certain conditions precedent, allows to strengthen the presence of ENI in the Eastern Mediterranean, a key region for the supply of natural gas, an important resource for the energy transition”, ENI says in a statement.

“The participation of Union Fenosa Gas in the Damietta plant (80%) will be transferred 50% to ENI and 30% to EGAS. The resulting shareholding of SEGAS will therefore be ENI 50%, EGAS 40% and EGPC 10%. ENI will also take over the contract for the purchase of natural gas for the plant and will receive corresponding liquefaction rights, thus increasing the volumes of LNG in its portfolio by 3.78Billion cubic meters per year, which will be available on an FOB basis, with no destination restrictions”., the company explains.

As regards Union Fenosa Gas’ assets outside Egypt, ENI will take over the commercial activities of natural gas in Spain, strengthening its presence in the European gas market.

The agreement comes at an important moment, when also thanks to the fast time to market of ENI’s natural gas discoveries, especially the ones in the Zohr and Nooros fields, Egypt has regained its full capacity to meet domestic gas demand and can allocate surplus production for export through its LNG plants.

Malabu: ENI’s Descalzi Has Won the Politics, but Can He Escape Judicial Conviction?

Section: Petroleum People · July 22, 2020 · No comments |

By Toyin Akinosho

ENI is wrestling with the request by the Italian Public Prosecutor for conviction of the Company, its former and current CEOs and the managers involved in the Malabu case.

The company says the pursuit of convictions “are completely groundless”.

Mr. Descalzi has held the reins of the Italian E&P major for six years. His appointment, last May, for a third term of another three years by the President of Italy, is clear indication that he has won the politics of the most important challenge to his reputation.

Sergio Mattarella’s government is either convinced that Desclazi is untainted by the Malabu case, involving alleged corrupt dealing with Nigerian officials in the course of the purchase of the Oil Prospecting Licence (OPL)245, or it would rather have a seasoned technocrat at the helm of its largest energy company to steer the country into the green economy, however smeared that technocrat is.

So, the political arm of the Italian government has signaled that it is comfortable with the 65-year-old, hard-working graduate of Physics from the University of Milan, but the country’s Judiciary has indicated, consistently, that it is not sure he is clean.

The fact that the state prosecutor is still pursuing “a conviction of the current CEO” says a lot about how it is convinced of wrongdoing.

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 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, who has been ENI’s CEO since May 2014, is on course of being the longest serving CEO of ENI in 30 years, if this case does not stop him.

He joined the company 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.

ENI’s press release earlier today, July 22, 2020 repeats the claim it has always made: “ENI and Shell paid a reasonable price for the license directly to the Nigerian Government, as contractually agreed and through transparent and linear means. Furthermore, Eni neither knew nor should have been aware of the possible destination of the money subsequently paid by the Nigerian government to Malabu. Moreover, the payment was made after an inquiry carried on by the UK’s Serious Organised Crime Agency (SOCA).

“So there can therefore be no bribes from ENI in Nigeria, no existence of an ENI scandal. ENI recalls the decision of the Department of Justice and the US SEC, which decided to close its own investigations without taking any action against the company.

“The multiple internal investigations entrusted to international third parties by the company’s supervisory bodies have long since highlighted the absence of unlawful conduct. ENI trusts that the truth can finally be re-established following the defensive arguments that will be presented at the end of September, pending the Milan Court’s forthcoming verdict”.