Royal Dutch Shell has admitted that it always knew that some of the payments made by the company to Nigeria end up in private hands.
Speaking to Reuters, Shell spokesman Andy Norman said the group “always knew” the Nigerian government would compensate the company, Malabu Oil and Gas, “to settle its claim on the block”.
It said some of those monies would go to a company associated with former Nigerian Petroleum minister Dan Etete.
The former minister, it could be recalled, had been convicted of money laundering.
The admission came as the deal and what Shell and its partner on the block, Eni, are being investigated by courts in Milan and Nigeria.
The licence had been awarded to Malabu in 1998 under then-President Sani Abacha, though a successive government revoked the licence.
Malabu appealed that decision, and the status of the licence was uncertain at the time Shell finalised the deal with the Nigerian government in 2011.
Shell’s acknowledgement that it always knew that the Nigerian government would pay some of the money to Malabu also follows a report released this week by campaign group, Global Witness.
The group said it had proof that Shell executives were told payments would go, not only to Malabu but also to, a string of Nigerian business people.
Shell had previously said in statements to Reuters only that its payments from the deal went to the Nigerian government.
“Over time it became clear to us that Etete was involved in Malabu and that the only way to resolve the impasse (over disputed ownership claims) through a negotiated settlement was to engage with Etete and Malabu, whether we liked it or not,” Norman said.
Etete was convicted of money laundering in a 2007 French case related to his time in the Nigerian government.
Etete has remained out of reach to comment after Shell’s statement admitting it knew that part of its payment would go to Malabu.
Norman added that the company believes the settlement was a fully legal transaction with the Nigerian government but did not provide further detail.
Courts in Nigeria and Italy are investigating the purchase of the offshore block, known as OPL 245.
Shell and Italy’s Eni paid $1.3 billion for the rights to the block, which industry estimates say could hold more than 9 billion barrels of oil.
Italian prosecutors have asked for Eni chief Claudio Descalzi to be sent to trial over alleged corruption related to the purchase of the block.
Eni has said that neither the company nor Descalzi were involved in any illicit conduct.
A Nigerian court ordered the block temporarily seized in January at the request of the country’s Economic and Financial Crimes Commission, but the move was overturned.
An Eni spokesman on Tuesday again denied any wrongdoing by the company or its personnel.