ENI Eni Spa

By Sarah McFarlane and Eric Sylvers 

An Italian court acquitted oil companies Royal Dutch Shell PLC and Eni SpA, along with the latter's chief executive, of bribery in connection with oil-drilling rights in Nigeria, ending a three-year trial that had shone a spotlight on the energy industry's operations in Africa.

Shell, Eni and individuals including current Eni CEO and company veteran Claudio Descalzi were on trial over a $1.3 billion payment made for drilling rights in Nigeria that prosecutors argued was mostly for the purpose of bribes. Eni and Shell jointly bought drilling rights off the coast of Nigeria in 2011 in an area known as OPL 245.

The verdict, which concludes a rare instance of top executives from Western oil companies facing prosecution for corruption, comes at a time of increased scrutiny of foreign bribery. U.S. and European authorities have enacted a growing body of laws aimed at stamping out corruption around the world.

Last year Eni agreed to pay $24.5 million to resolve alleged violations of the U.S. Foreign Corrupt Practices Act, in relation to contracts it won with an Algerian state-owned oil company. Eni neither admitted nor denied wrongdoing in the settlement.

The Italian court case concerned a payment Eni and Shell made to a Nigerian government bank account in London. According to court documents, the money later landed at a Nigerian shell company owned by a former oil minister, who was later convicted in France of money laundering. From there, the money was paid out in kickbacks that funded a variety of purchases by Nigerian nationals, including a private jet in the U.S., according to the court documents.

Eni, Shell and their managers maintained they didn't know the money would be paid out in bribes.

All other defendants were also acquitted, including Paolo Scaroni, Eni's chief executive at the time of the deal, Roberto Casula, Eni's former head of exploration at the time, and Malcolm Brinded, Shell's former chief of global exploration and production.

The Italian prosecutors, who were seeking eight-year jail sentences for Messrs. Descalzi and Scaroni, can decide whether or not to appeal the acquittals when the three judges who ruled in the trial publish their reasoning in the coming weeks.

"Descalzi gets his professional reputation back today," said Paola Severino, a lawyer for Mr. Descalzi, who was reappointed last year for a third term at the helm of Eni.

Global Witness, a London nonprofit that investigates allegations of wrongdoing in the resources industry, said it would urge the Milan prosecutor's office to consider an appeal. The verdict can be appealed twice in Italy's court system.

"We await the details of how the judges reached this ruling, but believe this verdict shows just how hard it is to hold the fossil fuel industry to account," said Barnaby Pace, senior campaigner at Global Witness.

The trial was closely followed in Italy, where Eni is considered to be one of the country's corporate jewels. The government owns about a third of Eni.

"We were obviously confident in the innocence of our client, but this was such a high-profile case and the pressure from all over was so strong that you can never be sure," said Giuseppe Fornari, the lawyer for Mr. Casula. "Sometimes in a trial like this you can lose on a tiny detail."

Eni and Shell welcomed the ruling.

"After almost three years of trial, the judgment by the court has finally established that the company, the CEO Claudio Descalzi and the management involved in the proceedings have all behaved in a lawful and correct manner," Eni said in a statement.

"We work hard every day to ensure our actions not only follow the letter and spirit of the law, but also live up to society's wider expectations of us," Shell CEO Ben van Beurden said after the verdict.

Write to Sarah McFarlane at sarah.mcfarlane@wsj.com and Eric Sylvers at eric.sylvers@wsj.com

(END) Dow Jones Newswires

March 17, 2021 15:31 ET (19:31 GMT)

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