Dan Etete

Chief Dan Etete was Nigeria’s Minister of Petroleum from 1995 until 1998 during the military dictatorship of General Sani Abacha. “Chief” is a customary title among teh Ijaw people, a group that lives in the oil-rich state of Bayelsa in the Niger Delta.

In 2007, Dan Etete was convicted by the Court of Paris of international money laundering: €16 million from bribes for oil licences.

Before leaving the ministry in 1998, Etete awarded the oil exploration licence for one of Nigeria’s richest offshore oil blocks, known as OPL 245, to a company of which he was the ultimate beneficiary: Malabu Oil & Gas.

The legitimacy of the allocation of the licence to Malabu was one of the most debated issues during the trial. According to the prosecution, Etete was the sole owner of Malabu and the assignment of Opl 245 was illegitimate because of Etete’s conflict of interest, since he was both assignor and assignee of the licence. The Court of Milan considered this to be a “now irrelevant” concern, because “in the twenty years following the assignation, the Government adopted conflicting measures, most of which had as their object precisely the reaffirmation of Malabu’s rights”.

The Court in Milan accepted that Etete was “related” to Malabu. Although Malabu’s corporate records did not disclose that link, a 2010 due diligence report commissioned by Eni recorded that “”Whatever the formal ownership structure of Malabu, all of the sources to whom we have spoken are united in the opinion that Dan Etete is the owner of the company”.

Malabu’s ownership is still the subject of ongoing legal proceedings in Nigeria – the son of the former dictator, Mohammed Sani Abacha, claiming to be the real owner. Abacha’s legal intervention to establish his ownership caused Eni and Shell to cease negotiations for a direct purchase of OPL 245 from Malabu – and instead to seek an arrangment whereby the block was acquired through a complex settlement agreement with the Nigerian Government.

The Court in Milan cited the disputed ownership of Malabu as a reason for doubting the prosecution claim that kickbacks from the deal were paid by the defendants to Nigerian public officials and Eni managers. The prosecutor had argued that a handwritten note made by middleman Granier Deferre envisaged the funds that flowed from any deal being paid into two accounts, described respectively as “M1” and “M2”. According to the Prosecutor, one of those accounts was intended for Eni managers. But the judges argued that it equally plausiblethat the two accounts were simply a reflection of the dual ownership of Malabu, with the monies it received being split between Etete and Abacha.

In Milan, Dan Etete was acquitted of the charge of being the lynchpin around which the alleged $1.1 billion Eni and Shell bribe plot was said to be woven, as according to the Milan judges there was no “corrupt agreement” between Etete and the two oil companies. The court, however, left open the possibility that there may have been other corrupt agreements in Nigeria and therefore that the money from the two oil companies may have been distributed as bribes in a second phase. If so, then any criminality would have been outside of the jurisdiction of the Italian courts.

One of the charts used by the prosecution to map the distribution of money paid by Eni and Shell to the Nigerian government for the acquisition of Opl 245 shows that Etete is the recipient of about $300 million used “for his own benefit and that of a great many other beneficiaries for the purchase of real estate, planes, armoured cars and other things”.

Investigations by the Prosecutors office etsbalished that an Etete-associated company called Rocky Top company received and redistributed $411,233,907. The money was used to purchase a private plane worth $50 million (which was seized in Canada in September 2020) and to pay “sums owed to the French justice system following the conviction for money laundering (about $7.5 million)”. In addition, payments were made to suppliers of luxury goods (safaris, precious stones, watches, cars, furniture, antiques), lawyers (Edwards Angell Palmer & Dodge UK) and to Etete’s relatives (Monica Etete, Odiere Etete, the company Peredoaya City traceable to her son Ken Etete who received $36.018.900).

In his dealings with Eni over OPL 245, Dan Etete relied on an intermediary, Emeka Obi, with whom he ultimately fell out. When Etete failed to pay Obi his commission, Obi filed a complaint with the Commercial Court in London, demanding a $215 million in fees. Malabu was obliged to pay the sum into the UK court, pending a ruling. In its 2013 judgment, the English court awarded Obi a payment of $110 million. The remaining money was frozen at the request of the Milan Public Prosecutor’s Office and subsequently returned to following a civil court action.

Throughout the negotiations for Opl 245, Etete and Malabu were viewed by Eni and Shell as problematic: Etete because of his reputational problems (in addition to his conviction for money laundering, he was also viewed as a “terrible payer“): Malabu because of its opaque corporate structure.

Etete’s reputation was also a problem for some of the banks handling the transfer of funds from the deal. The first attempted transfer involved the use of an account at the BSI bank in Lugano held by Petrol Service Co., a “guarantee” company set up for this purpose and linked to the honorary vice-consul of Port Harcourt, Gianfranco Falcioni. That payment was refused and the money was returned to the issuing bank, JP Morgan Chase of London, because of ‘compliance problems. In internal emails, BSI stated that it did not wish to enter into relations with Dan Etete, identified as the main beneficiary of the funds, because of Etete’s money laundering conviction.