For immediate release: Sunday 20th May 2012 Shell’s obscure payments kill its case for weak US and EU transparency laws The details of payments agreed by Shell to the Nigerian Government for a controversial oil deal expose the urgent need for the very transparency measures which Shell is currently opposing. Nigerian subsidiaries of Shell and ENI agreed to pay the Nigerian Government US$1,092,040,000 to acquire offshore oil block OPL 245, New York court documents have revealed. Controversially, the court documents also reveal that the Nigerian government agreed, in the same month, to pay precisely the same amount to Malabu Oil and Gas, a company widely reported as controlled by Abacha-era Minister, Dan Etete, who was convicted in France in 2007 of money-laundering.  The documents include a court judgement which states that “…it does appear that the FGN (Federal Government of Nigeria) was indeed the proverbial “straw man” holding $1.1 billion for ultimate payment to Malabu”. (Note 1) Shell and ENI deny paying any money to Malabu Oil and Gas in respect of the licence and say they dealt only with the Nigerian Government.  The block has been subject to long-standing disputes between the government and Malabu, as well as a separate dispute between the government and Shell. (Note 2)  “We do not allege that the companies made a payment directly to Malabu – but given the history of this block, both Shell and ENI need to explain what steps they took to ensure their payments did not ultimately end up in the hands of the Malabu or ex-Minister Etete,” said Brendan O’Donnell, oil campaigner at Global Witness. “At the very least, Shell and ENI must disclose full details about their arrangements with the Nigerian government to obtain this oil block.”   Details of the arrangements made between the Nigerian Government and Malabu in April 2011 will be extremely embarrassing for Shell. Shell is at the forefront of an aggressive lobby effort to critically weaken new U.S transparency laws which require oil, gas and mining companies to publish the payments they make to governments on a project-by-project basis. Shell is also involved in the intensive industry lobby campaign against moves to create similar legislation for European extractive industry companies. Central to their effort to gut these laws, is the demand to remove the sort of specific ‘project-by-project’ disclosures that would make payments for OPL 245 transparent. Shell and others argue that the publication of aggregate “levels of government” payments is sufficient, and that project level reporting “will not provide any meaningful transparency in a significant majority of the countries where we operate”.  But reporting at a government level only, would continue to obscure payments like those agreed for OPL 245, denying citizens the ability to ensure that they are not looted. “Shell’s credibility to act as an honest broker in discussions around these new U.S and EU transparency laws is in tatters as a result of these revelations,” said Simon Taylor, Director of Global Witness and Co-founder of the Publish What You Pay campaign.  “This is the second time in just a few months that Global Witness has highlighted significant undisclosed payments made by big oil companies in countries known for corruption. How many more will we uncover before the penny drops that companies must disclose the payments they make on a project-by-project basis?” Although Shell had published details of payments made to some governments in 2011, the company’s reports do not enable citizens to identify payments made for specific licences or deals, such as OPL 245.  Policy-makers and regulators must not cave in to pressure to remove the requirement for extractive companies to publish project-level payments. It is only through project-by-project disclosure that citizens can become aware of such payments, enabling them to hold their governments to account.  Given that there is no discretionary ability for U.S regulators to remove project-level reporting from the U.S law, European policy-makers interested in ensuring a level playing field, must ignore big oil’s scare-tactics and ensure European law also requires disclosure down to the project level. “If Shell and others have their way, far from creating effective transparency, these new laws could end-up aiding and abetting state looting by enabling payments to be hidden at the project level,” continued O’Donnell. Global Witness is calling for: Shell and ENI to publish full details about the arrangements they undertook to acquire OPL 245 Stop lobbying to weaken transparency requirements in the US, EU and elsewhere.  This must include a divorce from the American Petroleum Institute’s (API) threat to sue the Securities and Exchange Commission (SEC) should it come out with a rule consistent with the spirit of the Congress that wrote the law. Policy-makers in Europe, together with the Commissioners of the US SEC must ensure that project-by-project disclosure remains a key part of the U.S and European extractive industry transparency laws. Regulators to ensure that there are no provisions for countries to be exempt from the legislation as this would create a massive loophole, allowing corrupt regimes to pass blocking laws in their home countries – in effect, a ‘dictators’ charter’. Ambassador Joe C. Keshi  had earlier retired from the  federal civil service of Nigeria, after an illustrious career and meritorious service to the country. He spent thirty four years in the service, twenty eight in the Ministry of Foreign Affairs and six in the Presidency, Office of the Secretary to the Government of the Federation, first as the National Coordinator of the Nigerian National Volunteer Service and later as the Permanent Secretary, Cabinet Secretariat, under  both Chief Olusegun Obasanjo and Ahaji Umaru Musa Yara dua He served under three distinguished Secretaries to the Government of the Federation, Obong Ufort Ekaette; Amb Babagana Kingibe and  Mahmud Yayale.