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Nigeria has filed a lawsuit against JPMorgan, accusing the investment bank of transferring most of the money that Shell and Eni paid for the acquisition of the infamous block OPL 245 to accounts held by a company controlled by then-energy minister Dan Etete.
The suit is part of what is turning into a veritable legal saga around the offshore field. Shell and Eni bought it for US$1.3 billion from a company named Malabu Oil and Gas back in 2011. The company turned out to have been controlled by former minister Etete, and last year Italian prosecutors said the two oil majors will stand trial for bribing Etete to get a better price for the field.
Now, the Nigerian state is alleging that JPMorgan had an instrumental role in the affair. According to the suit, the US$1.3 billion payment was deposited by the buyers in an escrow account that JPMorgan managed. Then, the bank transferred over US$800 million to several accounts in the name of Malabu Oil and Gas. The sum eventually ended up in two accounts controlled by Etete himself.
According to the suit, the bank acted in gross negligence by failing to conduct due diligence to make sure the money stays in accounts controlled by the government. The filing, with a London court, says, “If the defendant acted with reasonable care and skill and/or conducted reasonable due diligence it would or should have known or at least suspected ... that it was being asked to transfer funds to third parties who were seeking to misappropriate the funds from the claimant and/or that there was a significant risk that this was the case.”
Like Shell and Eni, JPMorgan has denied any wrongdoing, with a spokeswoman telling Reuters that the bank, “considers the allegations made in the claim to be unsubstantiated and without merit”.
The oil companies will stand trial later this year, while in the meantime there are two ongoing investigations into the infamous deal, one in Nigeria, and one in the Netherlands, Shell’s home country.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.