Malabu Scandal: Twist As Shell Writes Down OPL 245 License

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A new twist has been introduced to the ongoing criminal trial of the Oil Processing License, OPL 245 offshore field as Multinational Petroleum Oil And Gas giant, Royal Dutch Shell, one of the key figures in the middle of what has now been termed as ‘unprecedented corporate corruption trial’ in the oil and gas sector, announced that it would write down its investment in the offshore field in Nigeria.

A write-down is the accounting term used to describe a reduction in the book value of an asset due to economic or fundamental changes in the asset, thus becoming an impaired asset.

Shell announced the write-down during its second-quarter 2020 earnings call on Tuesday. The company had recorded losses in its upstream division, including a post-tax impairment charge of $4.7 billion related to write-downs of the Malabu oilfield, and assets sales in North America and Brazil.Malabu Oil Scandal shell eni

Read also: Shutdown Threats: FG Set To Open Dialogue With Oil Communities – Deputy Gov.

The company also announced that its upstream division had losses of $6.7 billion, due to a 7% fall in production to 2.4 million barrels a day. However, adjusted earnings for the second quarter fell to $600 million compared to $3.5 billion this period last year.

The OPL license has been at the heart of protracted litigation in Italy after prosecutors alleged corruption. Shell bought the oilfield alongside an Italian company, Eni, in 2011. Together, they paid $1.3 billion. The payment was to a company called Malabu, which was owned by Nigeria’s former Oil Minister Dan Etete. However, Italian prosecutors claim that most of the payments were kickbacks to Nigerian government officials.

The prosecutors have, therefore, called for an 8-year prison sentence for former Eni CEO, Paolo Scaroni. Both companies have been fined $1.04 million and prosecutors seek the confiscation of $1.092 billion from the defendants of the case.

The prosecutors also called for jail terms ranging from ten to five years for all principal actors in what has now been termed as ‘unprecedented corporate corruption trial’.

By Babajide Okeowo (content Editor
By Babajide Okeowo (content Editorhttps://newdiplomatng.com/
With a career spanning over a decade spent across the Business, Political and Entertainment beats of prominent media organizations in Nigeria, Babajide Okeowo has carved a niche for himself as a Journalist of repute. As a newsroom guru, he has penned several weighty narratives and designed content that speak to a news medium's values, vision and mission while ensuring that the content resonate pretty well with a variety of critical audiences across Nigeria and beyond. A consummate storyteller whose coverage of the business industry is valuable, Okeowo is blessed with a vast analytical mind and data interpretation skills. In his spare time, he interprets data for a Leading American University while also volunteering for a Non-Governmental Organization on Mindset Transformation. Okeowo is the Content Editor of The New Diplomat.

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