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Extractive Industries/Mining/Oil & Gas
Rome, Italy
Nationality of Foreign Officials: Algeria
Summary of Allegations:
Between 2007 and 2010, Saipem allegedly engaged in a scheme to bribe various Algerian government officials to secure contracts awarded by Algeria’s state-owned oil company. To conceal the payments, Saipem entered into four sham contracts with an intermediary with little due diligence and paid it over €198 million (approximately US$ 215.2 million) without actual services rendered. Saipem mischaracterized the payments as legitimate fees and obtained at least seven contracts from the Algerian state-owned oil company; Saipem’s former executive when later hired to be Eni’s CFO (later identified as Alessandro Bernini) continued to conceal the nature of the payments and facilitate the bribery scheme. Eni consolidated Saipem’s false financial statement without correcting the mischaracterization.
According to Eni's 2010 annual report, the Public Prosecutor of Milan sent a document request to Eni on 4 February 2011 regarding allegations of "international corruption." The documents that the Public Prosecutor sought involved the contract between Saipem (Eni's oil service subsidiary) and Sonotrach (Algeria's state-owned energy enterprise) for the GK3 gas pipeline and the GALSI/Saipem/Technip gas pipeline contract.
On 5 December 2012, Saipem announced the suspension of the Chief Operating Officer in its Construction and Engineering Department, Pietro Varone, and an unnamed company officer. In a press release, the Company explained that the suspensions result from the Public Prosecutor of Milan's investigation of allegations "up through 2009 in connection with certain contracts in Algeria."
Also on 5 December 2012, the Board of Directors of Eni announced that Pietro Franco Tali had tendered his resignation from the positions of Chief Executive Officer and Deputy Chairman of Saipem. The statement also announced that Alessandro Bernini had resigned from his position as Chief Financial Officer of Eni. Mr. Bernini had previously been the Chief Financial Officer of Saipem until 2008. On 7 February 2013, the New York Times reported that Saipem had said that Mr. Tali was also being investigated.
On 7 February 2013, Bloomberg News reported that the size of the alleged bribes relating to Saipem's contracts in Algeria amounted to EUR 197 million and that the contracts were worth a total of EUR 11 billion. Bloomberg News also reported that Public Prosecutor of Milan opened an investigation into Eni and its Chief Executive Officer Paolo Scaroni regarding the bribes allegedly paid in Algeria. The article also states that Mr. Scaroni's home and office were searched as part of the investigation.
On 11 February 2013, Reuters reported that an Algerian "special court" initiated an investigation into allegations of corruption potentially involving Eni, Saipem, and Sonatrach. Reuters reported on 23 April 2013 that the Algerian investigation has expanded but Saipem does not know who it now includes. The Reuters article from 23 April 2013 also said that Saipem is concerned that, as a result of the investigation, it could lose up to EUR 500 million in payments it is owed by the Algerian government.
On 21 January 2014, Eni said forensic audits carried out by its representatives revealed no evidence of illegal or corrupt conducts at Eni nor the existence of intermediary contracts between Eni and the third parties under investigation." Eni further stated that it will be sharing the audit results with the investigators.
The leak of the Panama Papers in 2016 included documents that indicate that a Swiss bank account was used to purchase shell companies that were themselves used allegedly to make payments to persons close to the former Algerian energy minister Chekib Khelil, in order to help Saipem win approximately US $10 billion in pipeline contracts from Sonatrach.
Approximate Alleged Payments to Foreign Officials: US $215.2 million
Business Advantage Allegedly Obtained: US $10 billion in Saipem contracts
Nationality of Foreign Officials: Brazil
Summary of Allegations:
Saipem allegedly paid USD 1 million in bribes to Renato Duque, former service director of Petrobras and gave him 13 works of art worth roughly USD 174,000. It is alleged that Saipem used Jo?o Bernardi, sales representative for Saipem Brazil, and his colleagues to facilitate the payment to Swiss bank accounts. In exchange, as the senior executive responsible for contracting, Mr. Duque allegedly favored Saipem on a 2011 contract for an undersea gas pipeline for the Lula and Cernambi offshore subsalt fields.
Approximate Alleged Payments to Foreign Officials: USD 1 million & USD 174,000 worth of art
Business Advantage Allegedly Obtained: Contract for an undersea gas pipeline for the Lula and Cernambi offshore subsalt fields was awarded to Saipem in 2011.
Nationality of Foreign Officials: Iraq
Summary of Allegations:
Eni's 2011 annual report states that on 21 June 2011, authorities in Fano, Italy notified Eni Zubair that they had obtained a search warrant to investigate allegations of corruption and conspiracy involving Eni Zubair's contracts in Iraq. The authorities searched the home and office of an Eni Zubair employee.
Approximate Alleged Payments to Foreign Officials: Unspecified
Business Advantage Allegedly Obtained: Unspecified
Nationality of Foreign Officials: Kazakhstan
Summary of Allegations:
According to Eni's 2010 annual report, the Public Prosecutor of Kazakhstan began an investigation in November 2007 regarding allegations of fraud in reference to a 2005 contract involving OIC. The investigation was terminated in 2011.
According to Eni's 2010 annual report, the Public Prosecutor of Milan sent requests for audit reports and other documents to Eni on 1 October 2009 regarding allegations of "international corruption, embezzling pillage, and other crimes" relating to the Kashagan and Karachaganak fields. The Tributary Police of Milan also sent document requests on 29 November 2010 regarding Eni's contracts with OIC and Agip KCO.
On 6 June 2012, the Wall Street Journal reported that a whistleblower email alleged that Eni had made improper payments to Kazakh customs officials. The email alleged that the members of the KPO consortium (Chevron, Eni, Lukoil, and BG Group) had been using DHL to make improper payments to Kazakh customs authorities since 2004. The purpose of the payments was to allow shipments to pass through customs in spite of small paperwork errors; without the payments, the errors could have caused significant delays in the importation of necessary supplies by these companies.
Approximate Alleged Payments to Foreign Officials: Unspecified
Business Advantage Allegedly Obtained: Unspecified
Nationality of Foreign Officials: Kuwait
Summary of Allegations:
On 21 June 2011, and according to Eni's 2011 annual report, authorities in Fano, Italy notified Saipem that they had acquired a search warrant to investigate allegations of corruption and conspiracy relating to Saipem's Jurassic project in Kuwait. The authorities searched the home and office of a Saipem manager.
Approximate Alleged Payments to Foreign Officials: Unspecified
Business Advantage Allegedly Obtained: Unspecified
Nationality of Foreign Officials: Libya
Summary of Allegations:
In its 2011 annual report, Eni reported that the U.S. Securities & Exchange Commission ("SEC") initiated an investigation into allegations regarding "certain illicit payments to Libyan officials." The annual report stated that the SEC had sent Eni a subpoena on 10 June 2011 requesting documents and information regarding Eni's business activities in Libya during the period of 2008 to 2011. The company received another request from the SEC in December 2011.
Approximate Alleged Payments to Foreign Officials: Unspecified
Business Advantage Allegedly Obtained: Unspecified
Nationality of Foreign Officials: Nigeria
Summary of Allegations:
OPL 245
On 4 July 2014, Italian prosecutors opened a probe into alleged corruption relating to the 2011 acquisition of a big oil field in Nigeria by Italian oil group Eni and Shell. The probe relates to the purchase of offshore oil block OPL 245 in Nigeria. British police began investigating a money-laundering allegation in connection with the same field in 2013.
The concession for offshore oil block OPL 245, which industry sources have said could contain up to 9.23 billion barrels of crude, was awarded to Eni SpA and Royal Dutch Shell by the Nigerian government in 2011 for USD 1.3 billion. The companies allegedly gave USD 801 million to the former Nigerian oil minister Dan Etete and a company he owns. Emails published by Global Witness indicate that executives at Shell were informed and had reason to believe or know that part of the payment would go to then-President Goodluck Jonathan, as well as others in Nigeria, as bribes. President Goodluck Jonathan allegedly received between USD 200 million and USD 500 million. Emails also indicate that Shell was aware that the payment would go to Dan Etete. In a phone call recorded in 2016, Shell's CEO Ben van Beurden and then-CFO Simon Henry expressed concern that the deal violated the FCPA.
In March 2018, Shell and Eni voluntarily disclosed findings of their respective internal probes regarding acquisition of OPL 245 to the DOJ and SEC. Shell additionally submitted the disclosure to the SFO. Both companies denied wrongdoing in the acquisition, stating that the USD 1.3 billion payment for the OPL 245 block to the Nigerian government was legitimate.
20 May 2018 - According to Reuters, the allegations against Shell and Eni (and the resulting upcoming criminal case) were bolstered by two separate civil lawsuits filed by individuals Emeka Obi (a Nigerian) and Ednan Agaev (a former Russian diplomat) against Nigerian company Malabu Oil and Gas. The individuals claim that Malabu owes them millions for their part in arranging meetings between Malabu and Shell and Eni. The individual cases revealed that Etete controlled Malabu and exposed multiple deposits from Eni and Shell into Nigerian escrow accounts that ultimately ended up with Malabu. Eni and Shell deny knowledge of Etete's interest in Malabu.
21 January 2020 - According to Agence France-Presse, former justice minister Mohammed Adoke (“Adoke”) allegedly accepted a bribe of 300 million naira from a businessman Abubakar Aliyu (“Aliyu”) to enable the sale of OPL 245 to Shell and Eni.
Approximate Alleged Payments to Foreign Officials: between USD 200 million and USD 500 million; 300 million naira
Business Advantage Allegedly Obtained: Concession for an offshore oil block awarded to Eni and Shell for USD 1.3 billion
Nationality of Foreign Officials: Republic of the Congo (Brazzaville)
Summary of Allegations:
2017 - Eni advised that it was being investigated for international corruption in the Congo Republic in connection with agreements signed by Eni's Congo subsidiary with Congo's Ministry of Hydrocarbons between 2013 and 2015, related to exploration and production permits.
Approximate Alleged Payments to Foreign Officials: unspecified
Business Advantage Allegedly Obtained: About obtaining permits and business partnerships.
Agencies: Algeria: Special Court
Results:
Year Resolved:
Compliance Monitor:
Ongoing: Yes
Details:
On 11 February 2013, Reuters reported that an Algerian "special court" initiated an investigation into allegations of corruption potentially involving Eni, Saipem, and Sonatrach. Reuters reported on 23 April 2013 that the Algerian investigation has expanded but Saipem does not know who it now includes. The same article also said that Saipem is concerned that, as a result of the investigation, it could lose up to EUR 500 million in payments it is owed by the Algerian government.
On 2 February 2016, the Court of Algiers ordered Saipem Contracting Algérie to pay a fine equivalent to approximately €34,000 for allegedly “inflating prices on contracts awarded by a public company engaged in industrial and commercial activities, taking advantage of the authority or influence of representatives of said company.” However, the court granted the company's request to unfreeze two current bank accounts, holding approximately €82 million in local currency, which have been blocked since 2010 in connection with the Sonatrach 1 trial. On the same day, Saipem announced that Saipem Contracting Algérie will assess the reasons given by the court and will appeal, as it firmly believes no price inflation above market rates occurred.
On 14 February 2022 the Tribunal of Algiers imposed a fine and compensation for damages against Saipem SpA, Saipem Contracting Algerie and Snamprogetti SpA Algeria Branch for a total amount of about 192 million euros. The Tribunal of Algiers also sentenced two former employees of Saipem Group to 5 years and 6 years in prison respectively. A third employee was acquitted. It is reported that Saipem Contracting Algerie and Snamprogetti SpA Algeria Branch will appeal against the conviction.
On 26 June 2022 Saipem stated they would challenge the decision by an Algerian court to uphold a previous ruling and fine against the company.
Agencies: Brazil: Unspecified
Results: Prosecution of Individuals
Year Resolved:
Compliance Monitor:
Ongoing: Yes
Details:
On July 29, 2015, Brazilian authorities charged Mr. Duque and Mr. Bernardi with money laundering and corruption in relation to the contract Petrobras awarded to Saipem France and Saipem Brasil in 2011.
On 12 August 2015, Saipem announced that the company has not received any notification regarding the matter from the Brazilian authorities.
On 30 May 2019 it was reported that Brazilian authorities had opened proceedings into alleged irregularities by two of Saipem's businesses in the awarding of a contract in 2011.
Agencies: Italy: Milan Public Prosecutor's Office
Results: No Action, Prosecution of Individuals
Year Resolved:
Compliance Monitor:
Ongoing: Yes
Details:
Algeria allegations
According to Eni's 2010 annual report, the Public Prosecutor of Milan sent a document request to Eni on 4 February 2011 regarding allegations of "international corruption." The documents that the Public Prosecutor sought involved the contract between Saipem (Eni's oil service subsidiary) and Sonatrach (Algeria's state-owned energy enterprise) for the GK3 gas pipeline and the GALSI/Saipem/Technip gas pipeline contract.
On 5 December 2012, Saipem announced the suspension of Pietro Varone, COO in its Construction and Engineering Department, and an unnamed company officer. In a press release, the Company explained that the suspensions result from the Public Prosecutor of Milan's investigation of allegations "up through 2009 in connection with certain contracts in Algeria." Also on the same day, the Board of Directors of Eni announced that Pietro Franco Tali had tendered his resignation from the positions of CEO and Deputy Chairman of Saipem. The statement also announced that Alessandro Bernini had resigned from his position as CFO of Eni. Bernini had previously been the CFO of Saipem until 2008. On 7 February 2013, the New York Times reported that Saipem disclosed the investigation of Tali.
On 7 February 2013, Bloomberg News reported that the Public Prosecutor of Mlan opened its investigation into Eni and Paolo Scarnoi, its CEO, regarding the alleged bribes paid in Algeria. Scaroni's home and office were searched as part of the investigation.
On 12 February 2015, Italian prosecutors sought to indict Eni, Saipem, and Paolo Scaroni, former chief executive of Eni, on corruption charges, alleging involvement in paying bribes to Algerian officials to win contracts.
On 2 October 2015, at the preliminary hearing, the judge upheld the application submitted in February 2015 by the Italian prosecutors for committal for trial against Saipem and former employees of the company for acts of corruption alleged to have taken place in Algeria up until the beginning of 2010. In the same trial, judge overturned preliminary court ruling against Eni and Scaroni, clearing the two of wrongdoings and throwing out the cases, and accepted a plea bargain for Tullio Orsi, former head of Saipem Contracting Algerie, sentencing him to two years and 10 months in jail and a 1.3 million Swiss franc (USD 1.3 million) fine.
On 9 October 2015, the judge ordered the seizure of assets worth 250 million euros (USD 268 million) from Farid Noureddine Bedjaoui, Pietro Varone and Samir Ouraied, three defendants in the case. The seizure covers the value of the bribes of 198 million euros plus 50 million euros in non-paid taxes on that sum.
On 27 July 2016, the judge indicted Eni, Scaroni and 8 others once again. The trial is set to begin on 5 December 2016.
On 19 September 2018, an Italian court imposed a 400,000-euro fine on Saipem, sentenced its former boss Alessandro Bernini for four years and a month, Pietro Tali and Pietro Varone to four years and nine months. The court did not hold Paolo Scaroni liable for Saipem’s conducts in the scheme and acquitted him.
Brazil allegations
On 12 August 2015, Saipem announced that the company received notice of an impending investigation and a request for documentation from the Milan Public Prosecutor's Office in relation to new criminal proceedings concerning the contract Petrobras awarded to Saipem France and Saipem Brasil in 2011.
Congo allegations
In April 2018, Milan prosecutors raided two unnamed Eni employees’ offices and seized documents of operations in Congo between 2009 and 2014, for agreements signed by its subsidiary in Congo and Ministry of Hydrocarbons about local permits and partnerships.
Prosecutors were said to be investigating to determine if the contracts were faciliated with bribes to Congo public officials.
Nigeria allegations
On 4 July 2014, Italian prosecutors opened a probe into alleged corruption relating to the 2011 acquisition of OPL 245 in Nigeria by Italian oil group Eni and Shell.
On 11 September 2014, Milan prosecutors disclosed that the CEO of Eni, Claudio Descalzi, was under investigation for alleged corruption tied to the company's 2011 acquisition of a Nigerian deepwater offshore block for USD 1.09 billion.
According to media reports on 8 February 2017, Italian prosecutors have asked that Descalzi, Paolo Scaroni (former chief executive of Eni) and nine others, as well as Eni and Royal Dutch Shell, stand trial over the corruption charges.
20 December 2017 - an Italian judge indicted senior executives at Royal Dutch Shell and Eni SpA on charges of corruption. Eni CEO Claudio Descalzi and former CEO Paolo Scaroni, and Malcolm Brinded, Shell's former chief of global exploration and production, will face trial beginning March 5, 2018, on charges that they knew that most of the USD $1.3 billion the companies paid to the Nigerian government in 2011 were bribes for Nigerian government officials including former Nigerian president Goodluck Jonathan.
07 February 2018 - Italian authorities have arrested 15 people in Italy on suspicion of adjusting lawsuits related to the Nigerian bribery scandal in favor of ENI. The Italian financial police are investigating the involvement of Massimo Mantovani, ENI manager and former legal director, and Piero Amara, one of ENI's lawyers.
19 March 2018 - the trial of Eni and Shell was postponed until 14 May 2018.
13 May 2018 - the trial against Eni and Shell for paying bribes to Nigerian officials to secure oil exploration rights and drilling licenses in Nigeria has commenced. Fifteen defendants -- former employees of each company an Dan Etete, Nigeria's ex-Minister of Petroleum -- face trial, although Etete's location is apparently unknown. Some of the key issues that led to the trial came from two separate civil suits filed by individuals Emeka Obi (Nigerian citizen)and Ednan Agaev (A former Russian diplomat) against Malabu Oil and Gas, who they claim owe them millions for their assistance in arranging meetings between Malabu and Eni and Shell.
13 June 2018 - Italy's Supreme Court denied an appeal from Royal Dutch Shell and four former Shell managers seeking to reverse the trial to the preliminary hearing stage due to alleged procedural errors. The SC ruled that the appeal was inadmissible.
20 July 2018, a court in Italy permitted Nigeria to recover damages against Shell and Eni as a civil party in the $1.3 billion bribery related to the purchase of OPL 245.
On 21 September 2018, a court in Italy convicted Emeka Obi and Gianluca Di Nardo of bribery and sentenced both to a jail term of four years.
On 18 December 2018, according to a court in Italy, Saipem was aware of and abetted the bribery scheme in winning the gas contract in Algeria without conducting due diligence on intermediaries.
According to media reports in February 2020, Aliyu Abubakar was suspected to be a central figure of the OPL 245 bribery scheme and was requested to stand trial relating to the matters by an Italian judge.
Kazakhstan allegations
According to Eni's 2010 annual report, the Public Prosecutor of Milan sent requests for audit reports and other documents to Eni on 1 October 2009 regarding allegations of "international corruption, embezzling pillage, and other crimes" relating to the Kashagan and Karachaganak fields. The Tributary Police of Milan also sent document requests on 29 November 2010 regarding Eni's contracts with OIC and Agip KCO.
Iraq allegations
Eni's 2011 annual report states that on 21 June 2011, authorities in Fano, Italy notified Eni Zubair that they had obtained a search warrant to investigate allegations of corruption and conspiracy involving Eni Zubair's contracts in Iraq. The authorities searched the home and office of an Eni Zubair employee.
On 2 August 2018, the Public Prosecutor of the Court of Milan requested documents from Saipem Spa regarding its businesses in Iraq between 2010 and 2014 relating to Unaoil.
Kuwait allegations
On 21 June 2011, and according to Eni's 2011 annual report, authorities in Fano, Italy notified Saipem that they had acquired a search warrant to investigate allegations of corruption and conspiracy relating to Saipem's Jurassic project in Kuwait. The authorities searched the home and office of a Saipem manager.
Agencies: Kazakhstan: Public Prosecutor of Kazakhastan
Results: No Action
Year Resolved: 2011
Compliance Monitor:
Ongoing: No
Details:
According to Eni's 2010 annual report, the Public Prosecutor of Kazakhstan began an investigation in November 2007 regarding allegations of fraud in reference to a 2005 contract involving OIC. The investigation was terminated in 2011.
Agencies: Nigeria: Economic and Financial Crimes Commission, Nigeria: Federal Court of Justice, Nigeria: Unspecified
Results:
Year Resolved:
Compliance Monitor:
Ongoing: Yes
Details:
The anti-graft agency allegedly filed new charges against Royal Dutch Shell and Eni SpA in 2017. In January, a court ordered Royal Dutch Shell and Eni SpA to give control of the license to the government while government investigations were conducted.
13 May 2018 - Human & Environmental Development Agenda (HEDA) is challenging Eni and Shell in court for their second trial. HEDA is seeking to strip Eni and Shell of their oil production licenses in Nigeria. The trial is slated to begin on 13 June 2018.
In December 2018, Nigeria filed a complaint against Shell and Eni SpA in the UK for fraudulent practices and corruption against the country related to the purchase of OPL 45 block, seeking payment of USD 1.1 billion which allegedly was used to bribe Nigerian officials.
21 January 2020 - Nigeria authorities prosecuted Adoke and Aliyu for their roles in the corruption scheme relating to the Shell and Eni scandal.
On 8 March 2022, it was reported that the trial for Mr. Adoke had stalled when the lead counsel for the Economic and Financial Crimes Commission (EFCC) had withdrawn.
Agencies: Switzerland: Office of the Attorney General
Results:
Year Resolved:
Compliance Monitor:
Ongoing: Yes
Details:
19 March 2018 - The Swiss OAG has blocked various bank accounts in Switzerland that are linked to the alleged Eni / Shell Nigeria oil bribery scheme, at the request of the Milan public prosecutor.
September 2018 - According to news media, in the course of a raid on a Geneva apartment, Swiss authorities uncovered Emeka Obi’s briefcase containing documents of potential relevance to the prosecution in Milan.
23 September 2019 - Swiss authorities allowed Geneva prosecutors to share with Italy materials seized in defendant Emeka Obi's briefcase.
Agencies: United States: Department of Justice, United States: Securities and Exchange Commission
Results: Declination, Settlement
Year Resolved: 2019
Compliance Monitor:
Ongoing: No
Details:
Nigeria and Algeria Allegations
March 2018 - Shell and Eni voluntarily disclosed findings of their internal probes regarding the acquisition of OPL 245 to the DOJ and SEC.
1 October 2019 - the DOJ closed the investigation into matters in Nigeria and Algeria without recommending further actions.
17 April 2020 - Eni reached a settlement with the SEC over violating the books and records and internal accounting controls provisions of the FCPA stemming from the bribery scheme in Algeria, with a total payment of approximately US$ 24.5 million (US$ 19,750,000 in disgorgement and US$ 4,750,000 in prejudgment interest).
The SEC closed its investigation into Eni's Nigeria allegations.
Agencies: United States: Department of Justice, United States: Securities and Exchange Commission
Results:
Year Resolved:
Compliance Monitor:
Ongoing: Yes
Details:
Iraq Allegations
In January 2019, the U.S. DOJ, aware of the ongoing investigation by the Public Prosecutor of the Court of Milan, asked Saipem Spa for voluntary production of documents about its general involvement with Unaoil and activities in Iraq in particular.
Agencies: United States: Securities and Exchange Commission
Results:
Year Resolved: 2013
Compliance Monitor:
Ongoing: No
Details:
Libya Allegations
In its 2011 annual report, Eni reported that the U.S. Securities & Exchange Commission ("SEC") initiated an investigation into allegations regarding "certain illicit payments to Libyan officials." The annual report stated that the SEC had sent Eni a subpoena on 10 June 2011 requesting documents and information regarding Eni's business activities in Libya during the period of 2008 to 2011. The company received another request from the SEC in December 2011.
On 29 April 2013, the SEC notified the company that they had closed the investigation without further claims or other observations.