Italian oil giant Eni in a public filing this month revealed further details about what corruption allegations and investigations its facing around the world.
Corruption allegations against Eni now include Nigeria, Iraq, Kazakhstan, Algeria, and Congo. The number of enforcement authorities, employees, and subsidiaries involved in these allegations has also grown.
Block OPL 245 — Nigeria. Eni first mentioned allegations of international corruption in a Form 6-K (Report of Foreign Issuer) in 2014. In that report, the company said that it had been served with a notice of investigation in July 2014 by the Italian Public Prosecutor in Milan “relating to potential liability on the part of Eni arising from alleged international corruption.”
At the time, Eni said the prosecutor had commenced investigations “involving a third-party external to the group, and other unidentified persons.” As part of the proceeding, Eni said it was also subpoenaed for documents and other evidence.
The investigation resulted from a claim filed by ReCommon NGO relating to alleged corrupt practices which the prosecutor said would have involved a resolution agreement made in April 2011 relating to the Oil Prospecting license of the offshore oilfield that was discovered in Block 245 in Nigeria.
Eni said it is “fully cooperating with the prosecutor” and promptly filed the requested documentation. Furthermore, Eni said it reported the matter to the U.S. Department of Justice and the U.S. Securities and Exchange Commission.
Additionally, Eni’s Board of Statutory Auditors jointly with the Eni Watch Structure resolved to engage an independent, U.S.-based law firm, expert in anti-corruption, to conduct a forensic, independent review of the matter, upon informing the judicial authorities. “After reviewing the matter, the U.S. lawyers concluded in summary that no evidence of wrongdoing on Eni’s side were detected in relation to the 2011 transaction with the Nigerian government for the acquisition of the OPL 245 license,” Eni stated in its Form 6-K. “The outcome of this review was transmitted to the judicial authorities.”
In January 2017, a court ordered the seizure of the OPL 245 oil block and transfer of operations to the federal government upon a request from the Economic and Financial Crime Commission (EFCC). In March 2017, a Nigerian court overturned that request.
“Recently, Eni became aware of a formal filing of charges by the EFCC,” Eni stated in its Form 6-K, issued Sept. 7.
Congo. In July 2017, the Italian Finance Police notified Eni that it was investigating the company for alleged international corruption. The request expressly follows a previous information request it sent in March 2017 concerning “the verification of the relationship between Eni and its subsidiaries” since 2012 with certain third-party companies.
“The request related, in particular, to the agreements signed by Eni Congo with the Ministry of Hydrocarbons in 2013, 2014, 2015 in relation to exploration, development, and production activities of certain permits and the modalities used by Eni to identify the companies in partnership,” the Form 6-K, filed Sept. 7, stated. Eni said it has voluntarily disclosed the matter to the relevant U.S. authorities.
Kazakhstan and Iraq. A criminal proceeding is pending before the Public Prosecutor of Milan relating to alleged crimes of international corruption involving Eni’s activities in Kazakhstan “regarding the management of the Karachaganak plant and the Kashagan project, as well as handling of assignment procedures of work contracts by Agip KCO,” Eni’s Form 6-K states.
“The company has filed the documents collected and is fully collaborating with the public prosecutor,” the Sept. 7 Form 6-K stated. “A number of managers and a former manager are involved in the investigation.”
The criminal proceeding has been combined with a parallel proceeding related to Eni’s activities in Iraq, the Form 6-K stated. In June 2011, judicial authorities searched the offices of certain employees and third parties of Italy-based Eni Zubair and Saipem, Eni’s former controlled company, pertaining to alleged crimes of conspiracy and corruption as part of the “Jurassic” project in Kuwait.
The alleged crimes would have been committed “to illicitly influence the award of a construction contract outside Italy where Eni was the commissioning entity,” the Form 6-K stated.
Algeria. Legal proceedings also are pending both in and outside of Italy concerning allegations of corruption for the award of certain contracts to Saipem in Algeria. In 2011, Eni received from the Public Prosecutor of Milan an information request concerning allegations of international corruption pertaining to certain activities performed by Saipem Group companies in Algeria—in particular, a gas pipeline contract between Saipem and Sonatrach and a contract between Galsi, Saipem, and Technip for engineering of the ground section of a gas pipeline.
In 2012, the Public Prosecutor of Milan launched an investigation into Saipem for alleged liability of the company for international corruption. The prosecutor further requested the production of certain documents relating to certain activities in Algeria. The proceeding was unified with the Iraq-Kazakhstan proceeding.
Subsequently, Saipem was served a notice of seizure, a request for documentation, and a search warrant to acquire further documentation relating to certain intermediary contracts and sub-contracts concerning its Algerian business. The proceeding also involved several former Saipem employees, including Saipem’s former CEO, who resigned in 2012, and the former chief operating officer of Saipem’s engineering and construction unit, who was fired in 2013.
Eni also faces an investigation, in addition to Eni’s former CEO, former CFO, and another senior manager. Eni’s former CFO had previously served as Saipem’s CFO, including during the period in which alleged corruption took place and before being appointed as CFO of Eni in 2008, the Form 6-K stated.
Eni said it voluntarily contacted the U.S. Department of Justice and SEC in 2012 to inform them about this matter and about the developments in the Italian prosecutors’ investigations. In response, both agencies have launched investigations.
“Eni has furnished various information and documents, including the findings of its internal reviews, in response to formal and informal requests,” the company stated in its Sept. 7 Form 6-K.