A court in Milan is considering charges of corruption against Eni and Shell in a controversial oil deal that led to Nigeria losing an estimated $6bn.The campaign group Global Witness has calculated the OPL 245 deal in 2011 deprived Nigeria of double its annual education and healthcare budget......Read more via Nairaland – https://ift.tt/2SdHIL4 Get more: Nigeria Business News Global Witness said it had spent years investigating the deal, which gave Shell and Eni the rights to explore OPL 245, an offshore oil field in the Niger Delta.It has commissioned new analysis of the way the contract was altered in favour of the energy companies and concluded Nigeria’s losses over the lifetime of the project would amount to $5.86 billion, compared to terms in place before 2011. To do the analysis, Resources for Development Consulting pointed out that it used discounted cash flow modelling which is an industry-standard methodology used for valuation by oil companies and for revenue forecasting by governments. Assuming that oil price remains at $70 per barrel, Nigeria loses $5.86 billion projected revenue over the lifetime of the oil block when compared to earlier terms that had applied before the 2011 deal. “We discovered that Shell had constructed a deal that cut Nigeria out of their share of profit from the block,” a campaigner at Global Witness, Ava Lee, told the BBC’s World Business Report, adding,”This amount of money would be enough to educate six million teachers in Nigeria. It really can’t be underestimated just how big a deal this could be for a country that right now has the highest rates of extreme poverty in the world.”

It is understandable why Eni and Shell wanted to acquire the rights to develop OPL 245, because it is estimated to contain nine billion barrels of oil. This unfolding scandal, which is being played out in an Italian court, has involved former MI6 officers, the FBI, a former President of Nigeria, as well as current and former senior executives at the two oil companies. The two international oil and giants - Royal Dutch Shell and Italian Agip-Eni - paid out about $1.1 billion to Dan Etete, Nigeria's former petroleum minister who had previously been convicted of money laundering in France. Last year, Abubakar Malami, Attorney-General of the Federation and Minister of Justice, in a letter dated September 27, 2017 and addressed to President Muhammadu Buhari, said should Nigeria pursue the resolution of the Malabu oil deal that has dragged for years legally, the country stood a clear chance of losing.
A court in Milan, Italy, examines evidence submitted by the campaign group Global Witness, that alleges bribery around the attribution of the OPL 245 oil prospecting license in 2011 led to a loss for the Nigerian state estimated at US$6 billion.