Shell to cut 10, 000 jobs

Royal Dutch Shell has confirmed it is cutting 10,000 jobs amid its steepest fall in annual profits for 13 years.

Unemployment

It made $1.8bn (£1.23bn) for the fourth quarter of the year, compared with a $4.2bn profit for the same period the year before.

Full-year 2015 earnings were $3.8bn, compared with $19bn in 2014, the BBC reports.

The oil firm indicated it would report a massive drop in profits two weeks ago and said it would cut 10,000 jobs, partly thanks to its takeover of BG.

Royal Dutch Shell’s chief executive, Ben van Beurden, said: “The completion of the BG transaction, which we are expecting in a matter of weeks, marks the start of a new chapter in Shell, rejuvenating the company and improving shareholder returns.

“We are making substantial changes in the company, as we refocus Shell, and respond to lower oil prices. As we have previously indicated, this will include a reduction of some 10,000 staff and direct contractor positions in 2015-16 across both companies.”

Shell to cut 10, 000 jobs

NLNG: Shell, Total, ENI fleece Nigeria of $3.3bn —ActionAid

Not true, we’ve generated $33bn—NLNG

By Michael Eboh

Abuja—International advocacy group, ActionAid, yesterday, accused Shell, Total and ENI of fleecing Nigeria of $3.3 billion in seven years, through their investments in the Liquefied Natural Gas, operated by the Nigeria LNG Limited, NLNG.

NLNG is a joint venture, JV project owned by four shareholders, namely, the Federal Government of Nigeria, represented by the Nigerian National Petroleum Corporation, NNPC, which has a 49 per cent stake,  Shell Gas BV, SGBV, 25.6 per cent; Total LNG Nigeria Limited, 15 per cent; and Eni International (N.A,) N.V. S. A, 10.4 per cent.

Accordingly, based on their equity holding, the JV partners owe as follows:

NNPC – 49% – $1.62billion

Shell – 25.6% – $845 million

Total – 15% – $495 million

Eni – 10% – $330 million

However, in a swift response to the allegations, the NLNG debunked the claims, saying that the tax incentives and Federal Government’s investment in the NLNG had yielded $33 billion in the form of dividends, taxes and feed gas purchases for Nigeria over the past 16 years. It added that an additional $5 billion had accrued through corporate spend on local goods and services during the same period.

Unusual tax breaks

Specifically, ActionAid, in a public presentation of its report titled: ‘Leaking Revenue: How a big tax break to European gas companies has cost Nigeria billions,’ in Abuja, disclosed that the country was fleeced of the amount due to the extraordinary tax breaks granted the companies after the initial five-year tax break elapsed.

According to the report, the massive tax break was enabled by a unique law passed in 1990, adding that it was a triple whammy — a tax break in three parts — stretching from 1999 to 2012.

The report said: “First came a regular five year tax holiday granted to most investors in Nigeria. Second, an extension for a further five years exceptionally allowed for this particular deal. Thirdly, tax allowances that would have been used during the tax holidays were rolled over and exempted the companies from tax for a further two years.”

ActionAid further stated that the tax holiday extension meant the loss of about $2 billion in revenue, and the rolled over allowances where the same tax was effectively foregone twice, a further $1.3 billion. It added that tax foregone in the first five years was not counted, as this was the normal tax break.

The report also noted that while tax holidays are normal, 10-year tax holidays, the type granted to Shell, Total and Eni, are not tailor-made laws like the type in this instance.

ActionAid also disclosed that the consortium is the only company in Nigeria with its own law defining its tax framework, adding however, that there is little publicly accessible information about how a special tax framework was created for the consortium.

JV partners keep mum

All the Joint Venture, JV, partners in the project preferred to defer to NLNG’s response to the allegations; as none of them would comment on the issue when contacted by Vanguard.

While NNPC insisted that it is not the operator of the venture, Shell advised Vanguard to: “kindly direct all questions on this to NLNG,” and Total insisted that “the company is not owing,” and no word from Eni.

Although the Corporation noted that it is merely a partner in the venture, but the report queried the role of NNPC in the issue and expressed suspicion over NNPC’s remittances to the Federation Account, from its dividends, loan and interest repayments in the consortium.

To this end, ActionAid called on the Federal Government and the National Assembly, to ensure that proposed amendment to the Companies Income Tax Act, CITA 2004, effectively extending pioneer status tax holidays from five to 10 years is not implemented.

Allegations are false, misleading — NLNG

However, in a response to the allegations, Nigerian LNG, in a statement by its General Manager, External Relations Division, Mr. Kudo Eresia-Eke, maintained that the claim by ActionAid is false and misleading.

He added that the concept of tax holidays are not unusual practice in the global business community, as Angola offered as much as 12 years tax holidays to encourage investments in their LNG industry.

Furthermore, other countries like Oman, Malaysia, Qatar and Trinidad had offered up to 10 year tax holidays to attract LNG investments, he argued.

Eresia-Eke further noted that more generous tax incentive schemes currently exist in free trade zones in Nigeria, where participants are granted absolute exemption from all forms of taxes and levies chargeable by any level of government, in perpetuity.

Companies defraud Nigeria of huge sums — Hembe

Also speaking, Mr. Herman Hembe, a member of the House of Representatives, said the country has lost huge amount due to tax avoidance practices and tax breaks granted to companies.

He said: “Of more concern, however, is the tendency for the country to willingly give out its due resources through different types of tax incentives. Strangely too, in some instances, even in ventures where it has invested heavily as in this particular case of NLNG.

“While tax incentive is not wholesale a bad inappropriate approach for attracting investors, to provide jobs and to address concerns about development of industry; it is however, a dangerous option when it is just about reducing tax bills of companies.”

NLNG: Shell, Total, ENI fleece Nigeria of $3.3bn —ActionAid

$1.1bn Malabu Scam: Leaked emails show Shell, Eni, Jonathan’s aides conspired to divert money to Etete

Despite repeated denial by oil giants, Shell and Eni, that they did not know that the $1.1 billion they paid for OPL 245 was meant to be diverted to Malabu Oil and Gas, leaked emails have revealed that both companies were culpable in the plan to transfer the money to the dubious firm.

Malabu Oil and Gas, a shady oil firm, was incorporated by former Petroleum Minister, Dan Etete, five days before the oil bloc was awarded to it by the military regime of Sani Abacha.

Shell and Eni claimed however that they only paid the money to the Federal Government and have dismissed suggestions they knew the money would ultimately be sent to Malabu and Mr. Etete, an ex-convict.

But leaked email exchanges between officials of Shell and Eni obtained and published by Italian journalist, Claudio Gatti, showed that both companies actually wanted the money transferred to Malabu.

The mail showed the oil giants were involved in plans to make the transfer possible through the Federal Government, and also conspired to hide their involvement in the shady deal.

According to the leaked emails, six weeks before the deal was signed, an escrow agreement dated March 7, 2011 was drafted among the Federal Government, Malabu Oil and Gas Limited, Nigerian Agip Exploration Limited (NAE) (Eni’s Nigerian Subsidiary), Shell Nigeria Exploration and Production Company Nigeria Limited (SNEPCO) (Shell’s Nigerian Subsidiary), and J.P. Morgan Chase with the following passage showing the money was destined for Malabu:

 

(C)         Pursuant to the Resolution Agreement, NAE, on behalf of SNEPCO and NAE, has the obligation to wire transfer to the Escrow Account an amount of XXX million US Dollars ($XXX) to the benefit of FGN, within five (5) days from the date of execution of the Resolution Agreement.

(D)          The above amount shall be released by the Escrow Agent to MALABU on behalf of FGN pursuant to this Agreement, upon receipt of the Completion Notice.

But on March 30, 2011, conscious of the fact that it was getting involved in a criminal act, Shell sent another email to Eni which basically suggested a “new structure” for the deal that would hide its involvement with Malabu.

This new structure, which was later agreed by all involved in the deal, including the Federal Government, was tagged Resolution Agreements (RAs). An email from an Eni manager to Shell reads:

 

In general terms, Shell’s proposal to divide the RA in two separate agreements addresses part of Eni’s concerns, although it will need some re-work on our side. More specifically:

[…]

– FGN is envisaged to be the one paying Malabu directly. There is no need to refer to the Escrow Agreement no2, NAE paying to FGN etc; FGN shall pay Malabu and the fact that the money shall come to FGN from NAE is another matter dealt with under RA2.

– In general, we request to de-link, as much as possible RA 1 from RA 2, so that completion of RA 2 in [sic] not subject to the transaction under RA 1. […]

Two weeks before the deal was finalized, a meeting was held to discuss the final resolution.

The leaked email revealed that those present at the meeting were: Malabu representatives, Rasky Gbingie, Dele Adesina (Mr Etete’s lawyer), Shell managers Peter Robinson and Nike Olafimihan, Eni managers Roberto Casula, Vicenzo Armanna and Giorgio Vicini, Attorney General Mohamed Adoke and officials of the Ministry of Justice and Department for Petroleum Resources.

The minutes of the meeting reads:

 

Agenda

Discussion of draft OPL 245 agreements

The parties discussed the New Structure of agreements, in particular with respect to the comments from DPR.

Parties agreed to have 3 separate agreements and discussed the body of the text.

Finally parties agreed on the final wording as per attached documents

Way forward

The 3 agreements have been initialled by the respective parties. Parties to define the date for execution of the agreements.

 

A final email from Eni to Shell days before the deal was finalized further discussed whether Malabu would be in the room when the deal would be signed with the Federal Government.

 

Would Malabu attend the meeting as well? The resolution agreement with Malabu shall be signed at the same date, as well as the Shell resolution agreement. Is this going to happen?

 

When UK-based transparency organization, Global Witness, confronted Eni with the email exchanges it replied saying the organization misinterpreted the letters.

“We believe the interpretation in your letter is erroneous,” Eni said.

It added that it contracted a United States audit firm to investigate its involvement in the deal and nothing incriminating was found against it.

It however did not provide further details of the audit when Global Witness demanded for them.

Eni, however, did not respond to Global Witness’ questions, but in April 2015, it told Global Witness that: “We do not agree with the premise behind various public statements made by Global Witness about Shell companies in relation to OPL 245”.

On Tuesday, a British judge turned down request by Mr Etete for $85 million to be released to his fraudulent company, Malabu.

Justice Edis of the Southwark Crown Court ruled that he was not sure the administration of President Goodluck Jonathan acted in Nigeria’s interest when it approved the transfer of the money to Malabu.

“I cannot simply assume that the FGN, which was in power in 2011 and subsequently until 2015, rigorously defended the public interest of the people of Nigeria in all respects,” the judge ruled.

The judge also suggested that former President Goodluck Jonathan was beneficiary of the slush funds and was the person Italian investigators referred to by the code name “Fortunato”.

“The suggestion from the wiretaps is that “Fortunato” was implicated and I am told that this was a reference in code (not subtle) to the former president of Nigeria, President Goodluck Jonathan,” the judge said.

Fortunato is an Italian word that means “luck”, “lucky” or “good luck”.

 

Calls for government to cancel the deal and prosecute culprits

The director of Global Witness, Simon Taylor, said, “We now know beyond all possible doubt or denial that Shell and Eni knew exactly where their payment was going.

“It’s high time they stopped trying to mislead the public and investors about their role in this dirty deal, which deprived Nigeria’s citizens of over $1.1bn.

“To put that into context, $1.1 billion is equivalent to 80% of Nigeria’s health care budget for 2015.”

A Nigerian anti-corruption campaigner, Dotun Oloko, said “the Nigerian government needs to demonstrate to Nigerians and the wider public that it can and will rigorously defend Nigeria’s public interest by cancelling this contract and prosecuting all found culpable of wrongdoing.”

Nicholas Hildyard of The Corner House argued that “this evidence shows that high level executives in Shell personally took part in the creation, negotiation, and execution of this corrupt deal.

“It is now a matter of urgency that the judicial authorities in the UK, the US, the Netherlands and Nigeria, join forces with the Italian investigation into Eni, and properly investigate the role of Shell and its senior executives in this deal.”

Antonio Tricarico of Re:Common said: “Given the gathering pace of investigations into this deal and a call by the Nigerian House of Representatives to cancel the deal in 2014, investors in Shell and Eni, including the Italian public should demand to know why they were exposed to such risk.”

$1.1bn Malabu Scam: Leaked emails show Shell, Eni, Jonathan’s aides conspired to divert money to Etete

$1.1billion Fraud: British Judge questions Jonathan’s integrity, stops Etete from getting N17 billion

A British Judge on Tuesday refused to release $85 million (N17 billion) to Malabu, a fraudulent company controlled by Nigeria’s former petroleum minister, Dan Etete.

President Jonathan

In refusing to release the money to Malabu, Justice Edis of the Southwark Crown Court declared that he was not sure the administration of President Goodluck Jonathan acted in Nigeria’s interest when it approved the transfer of the money to Malabu.

“I cannot simply assume that the FGN which was in power in 2011 and subsequently until 2015 rigorously defended the public interest of the people of Nigeria in all respects,” the judge ruled.

PREMIUM TIMES had reported how the Jonathan administration controversially approved the transfer of $1.092 billion from Nigeria’s JP Morgan account in London to Nigerian accounts controlled by Malabu.

The money was paid by global oil giants, Shell and ENi, for Africa’s richest oil bloc, OPL 245.

The former Attorney General of the Federation, Mohammed Adoke, and the former Minister of State for Finance, Yerima Ngama, signed the documents approving the transfer to Malabu.

The fraudulent deal, shaded in various layers of corruption, has been condemned by Nigerians and international transparency advocates and is being investigated by authorities in four different countries.

THE SEIZED $85 MILLION

The $85 million was seized at the request of Italian prosecutors who are also investigating the deal. The money was the last part of the OPL 245 largesse not yet distributed.

Sensing that the Muhammadu Buhari administration was yet to find its feet on international legal matters, Mr. Etete approached the British court and asked that the money be returned to him.

At a two-day hearing that started on November 23, Mr. Etete’s lawyers argued that there was no fraud in the deal and asked that the money be released to him.

While Mr. Etete argued that the money be released to him, the Italian prosecutor argued that “their investigation could lead to a potential forfeiture of the money down the road.” a source who has followed the case and was present at the proceedings told PREMIUM TIMES.

Malabu’s lawyers told the court that freezing the money was an assault on Nigeria and questioned how the court could imagine that Messrs. Adoke and Ngama would be a party to a corrupt deal.

THE RULING

While giving his ruling on Tuesday, Justice Edis said while he could not say for certain if the deal was fraudulent pending conclusions of investigations, it would be inappropriate to release the money to Malabu.

“I am not making any findings of fact about misconduct by anyone. I am simply assessing the evidence before me to determine whether a restraint order should be discharged which was granted by way of MLA (Mutual Legal Assistance between the UK and Italy) to support an investigation by the Italian authorities,” the judge said.

The judge also made reference to evidence provided by the Italian authorities that ex-President Jonathan was directly involved in the fraudulent deal.

“The suggestion from the wiretaps is that “Fortunato” was implicated and I am told that this was a reference in code (not subtle) to the former President of Nigeria, President Goodluck Jonathan,” the judge said.

“Aliyu (Abubakar) is said to be associated with him and Aliyu received, in a way which was not transparent, $523m of the money paid for the OPL 245 licence in August 2011.”

PREMIUM TIMES had reported how fictitious companies owned by Abubakar Aliyu, a man referred to as ‘Mr. Corruption’ by anti-graft officials, received over half ($532 million) of the total $1.092 billion.

Mr. Aliyu, a close ally of Mr. Jonathan was recently quizzed by EFCC operatives for the first time despite being a central character in the deal whose investigation was virtually stalled during the Jonathan presidency.

ACTIVISTS REACT

Reacting to the ruling, Simon Taylor of Global Witness stated that “Given the gathering pace of the EFCC investigation in Nigeria under new leadership and a call by the Nigerian House of Representatives to cancel the deal in 2014, investors in Shell and Eni should demand to know why they were exposed to such risk.”

The UK based Global Witness has been at the forefront of the demand for transparency in the deal and other similar deals across the world.

Also reacting to the judgement, Dotun Oloko, an anti-corruption campaigner in Nigeria said, “In light of these allegations in a UK court, the role of the senior Nigerian officials involved in this deal, including Goodluck Jonathan, must now be fully investigated.”

With the ruling, Nigerian now has the opportunity to not only claim the money but also another $110.5 million of the funds held in a Swiss bank while investigations continue.

$1.1billion Fraud: British Judge questions Jonathan’s integrity, stops Etete from getting N17 billion

Sign undertaken on oil theft - Shell asks Nigerian oil exporter

Oil giant, Royal Dutch Shell, has asked ship owners exporting its Nigerian oil to sign a ‘letter of comfort’ to guarantee it is not stolen, according to an email from the company and seen by Reuters. In July, state-run Nigerian National Petroleum Corporation (NNPC) banned more than 100 tankers from Nigeria’s waters, citing a directive from President Muhammadu Buhari, who wants to trace and recover what he calls ‘mind-boggling’ sums stolen from the oil sector.

Last month, the NNPC lifted the ban but asked ship owners to sign a letter of comfort to ‘guarantee to indemnify’ it against any illicit use of their vessel. This led some owners to reject pending bookings. “Please be informed we expect LPG & Products ship owners to sign the NNPC LoC for any future Shell loading voyages,” the email said, referring to liquefied petroleum gas.

“Shell (is) putting (its) reputation on the table that warrants the cargo is NOT stolen and this should remove any concerns shipowners have around bad title down the oil chain,” the email said. Shell said it was looking to mitigate any negative impact that the requirement to provide the letter might have. “What we are doing is to ensure that our business is not adversely affected by working with our own vessel owners to provide this letter in the legal language that everyone can live with,” Shell Nigeria country chair, Osagie Okunbor, said at a press briefing last week.

Traders said the email showed that oil companies, trading houses and tanker owners were ensuring actions taken by Nigeria to prevent oil theft did not affect the market. They said other companies and trading houses had drafted similar letters to ensure trading continued without disruption. “I’ve not seen any vessels waiting around (outside oil loading terminals) because of the measures,” one trader said.

Sign undertaken on oil theft - Shell asks Nigerian oil exporter

Poll: Shell denies shutting down operations

The Management of Shell Petroleum Development Company of Nigeria has denied reports that it shut down its flow stations in Bayelsa State owing to fears of attack by aggrieved militants.

The SPDC’s spokesperson, Mr Joseph Obari, told the News Agency of Nigeria on Friday that the operations of the oil firm were running but declined further details.

“Our operations are continuing and we will not comment on security issues.” he said.

The reports had alleged that the oil firm acted to forestall attacks by militants aggrieved by President Goodluck Jonathan’s loss in the March 28, 2015 presidential poll.

Tunu and Bensede Kussi flow stations operated by SPDC in  Southern Ijaw and Kolokumo/Opokum Local Government Areas Bayelsa were allegedly shut down due to security concerns.

However,  NAN sources at the Tunu flow station within SPDC’s oil fields in Bayelsa State confirmed that the facility was shut down for operational reasons.

The source, who pleaded anonymity, said the shutdown had nothing to do with anticipated attack by militants.

“Tunu flow station was shut down for operational reasons not because of threat by ex-militants.

“Can we not shut down for operational reasons, what is the big deal if Tunu station is closed down for operational reasons ? I cannot understand why they are eager to drag Shell into all these,” he added.

Poll: Shell denies shutting down operations

Fear of Attacks: Shell shuts down flow stations in Bayelsa

YENAGOA – SHELL Nigeria Exploration and Production Company, SNEPCo, has reportedly shut down some of its flow stations in Southern Ijaw and Ekeremor Local Government Areas of Bayelsa state because of anxiety that ex-militants may attack the facilities following the outcome of the presidential election.

The incumbent President Goodluck Jonathan, who lost last Saturday’s presidential election to the President-elect, Gen Muhammadu Buhari (retd), is from Bayelsa state, but he had accepted defeat in good fate and urged his supporters to eschew violence.

Among the flow stations reportedly closed down are Tunu, Bensede Kussi, all in Bayelsa state, but Shell’s Corporate Media Relations Manager, Mr. Precious Okolobo and the company’s spokesman in Port-Harcourt, Mr Joseph Obari, in an SMS to our reporter, said, “Our operations are continuing and we will not comment on security issues.”

 

Fear of Attacks: Shell shuts down flow stations in Bayelsa

Shell accepts responsibility for Bodo spill

By Sebastine Obasi,with Agency report

Shell Petroleum Development Company, SPDC, has said it accepted responsibility for the two operational spills in Bodo, Gokana Local Government Area of Rivers State, and that it wants to compensate fairly and quickly, those who have been genuinely affected by the oil spill.

This came on the heels of British-based Amnesty International’s accusation that the company under-reported the size of two 2008 oil spills in the Niger Delta.

Amnesty International also said in a statement released on Thursday in the United Kingdom, that Shell had known for years that “its pipelines in the Niger Delta were old and faulty.”

Media Relations Manager of SPDC, Mr. Precious Okolobo, said in a statement in Lagos that following the 2008 spills, a team, including relevant government agencies, SPDC and representatives of the Bodo community, visited the spill sites and completed a Joint Investigation Visit report and that the estimated total volume of oil spilled was in the region of 4,144 barrels.

“As part of the litigation process, we asked satellite remote sensing experts, hydrologists and specialists in mangrove ecology to assess how the Bodo waterways and mangroves were impacted and other relevant information addressing the question of the volume of these spills and the extent of the damage.

“Having reviewed their findings, we accept that the total volume of oil released as a result of the two operational spills is likely to have exceeded the Joint Investigation Visit estimates.

“While naturally, the findings in relation to the Bodo Joint Investigation Visit and the volume of oil from these spills are of concern to us, it is not the key issue for the purpose of determining the appropriate level of compensation.

“SPDC is prepared to compensate all members of Bodo community who have been genuinely affected by the spills, taking account of the entire area which has been impacted,” it said.

The statement explained that SPDC had been working together with the National Coalition on Gas Flaring and Oil Spills in the Niger Delta to improve the quality of Joint Investigation Visits at SPDC facilities in the Niger Delta.

The statement by Amnesty International said a court document revealed Shell had repeatedly made false claims about the size and impact of two major oil spills at Bodo in Nigeria, in an attempt to minimise its compensation payments and that the potential repercussions are that hundreds of thousands of people may have been denied or underpaid compensation based on similar underestimates of other spills.”

According to Audrey Gaughran, Director for global issues at Amnesty International.

“Shell has admitted that it underestimated the volume of oil spilled in both spills and the impact of both, which is a very significant issue, because they’ve denied that for years. People have given them evidence that they were underestimating their damages repeatedly. The second thing that emerged in these court documents is that Shell has known for years that the pipes going through the Ogoniland area were past their reasonable use-by dates, were old, leaky and in the words of the document ‘a hazard’. And this has come from internal Shell documents that show they knew how bad the pipes were.”

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Shell accepts responsibility for Bodo spill