ENI Eni Spa

By Eric Sylvers 

MILAN -- Italian prosecutors have requested that Royal Dutch Shell PLC and the chief executive officer of Italian oil group Eni SpA stand trial over allegations of corruption tied to a large Nigerian oil deal, according to a person familiar with the situation.

The prosecutors have requested that Eni CEO Claudio Descalzi and 10 other people, including former Eni executives and Nigerian officials, be tried for alleged corruption tied to a deal Shell and Eni struck in 2011 to gain control of an offshore oil block in Nigeria.

At the time, the two companies won rights to the block after paying $1.3 billion. Eni paid the money to the Nigerian government, but about $1.1 billion was later transferred to a former oil minister, Dan Etete, according to documents from cases in the U.K. and Italy. Shell had already invested a large amount of money in the oil block and agreed to share the rights with the Italian group.

In documents reviewed by The Wall Street Journal, Italian magistrates have maintained that Mr. Descalzi, then the head of exploration, and Paolo Scaroni, Eni's CEO at the time, knew the government escrow account was a stopover for the money before it moved onto an account controlled by Mr. Etete and was eventually paid as kickbacks.

Mr. Descalzi took the helm in 2014 and has worked to refocus the companyand cuts costs to better prepare Eni to cope with low oil prices,

He and Eni have denied any wrongdoing. The company has maintained that it doesn't use middlemen and that its executives only dealt with the Nigerian government in the deal for the offshore block. Eni has said that it bears no responsibility for where the money subsequently went.

In a statement released Wednesday, Eni's board said that it believes Mr. Descalzi is innocent and expressed its support for the chief executive. A spokeswoman for Shell had no immediate comment.

It will take weeks or even months before an Italian judge rules on the prosecutors' request for a trial.

The requested indictments come just days after a Nigerian court ordered Eni and Shell to give up control of the large offshore oil block, which is known as OPL 245. Indictments in Italy could further embolden Nigerian officials to take on the two oil companies, according to analysts.

The Nigerian case has proved embarrassing not only for Eni, which has long been dogged by corruption allegations, but also the Italian government that owns 30% of the company and appoints the top management. Mr. Descalzi's three-year term is set to expire in April and his renewal could be complicated by the court case. A trial and eventual appeals could drag on for more than five years.

--Manuela Mesco contributed to this article.

Write to Eric Sylvers at eric.sylvers@wsj.com

(END) Dow Jones Newswires

February 08, 2017 14:28 ET (19:28 GMT)

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