On Wednesday, a London court will begin hearing a case filed by Nigeria against JP Morgan Chase, alleging more than $1.7 billion in damages for its role in a disputed 2011 oilfield sale.
The civil claim, which was brought in English courts in 2017, concerns Shell and Eni’s purchase of the offshore OPL 245 oilfield in Nigeria, which is also the subject of ongoing legal proceedings in Milan.
Nigeria claims JP Morgan was “grossly negligent” in transferring payments paid by energy companies to an escrow account controlled by the country’s former oil minister Dan Etete rather than into government coffers, according to court documents obtained by reporters.
The damages sought include money delivered to Etete’s company, Malabu Oil and Gas, in three installments totaling $875 million, plus interest, for a total of approximately $1.7 billion. According to court filings, the Nigerian government asked JP Morgan to conduct these transfers as part of the oilfield deal.
“J.P. Morgan is convinced that it acted properly in making these payments, which were approved by senior Nigerian government officials and only handled after considerable consultation with law enforcement and other agencies and courts. This claim will be vigorously contested by us; the bank’s spokesman confirmed this.
The bank’s London offices handle European, Middle Eastern, and African business, including Nigeria.
Etete’s lawyers did not respond to demands for comment right away. This suit does not include Etete as a party.
Shell and Eni are also not parties to the London High Court lawsuit. Shell has been silent about the matter.
“Eni was finally acquitted following the trial in Milan since there was no case,” Eni said in an email. “As a result, we have nothing to say with reference to the OPL 245 deal and the London trial, which does not involve Eni.”
The offshore oilfield license, OPL 245, was issued to a corporation owned by Etete by Nigerian military dictator Sani Abacha in 1998.
Industry experts considered the $20 million price tag – of which Etete paid around $2 million, according to court filings – to be excessively cheap, given that the block was predicted to deliver billions of dollars in crude, despite the fact that it was still undeveloped.
Following Nigerian administrations disputed Etete’s rights to the field, resulting in years of legal wrangling until a compromise was achieved in 2011 to put a stop to the disputes.
As part of a resolution deal involving Shell and Eni, Etete’s business Malabu Oil and Gas returned the undeveloped OPL 245 to Nigeria.
Shell and Eni paid a $200 million signature bonus to the Nigerian government and subsequently put $1.1 billion in the Nigerian government’s escrow account with JP Morgan to conclude the agreement, according to court filings.
Shell, Eni, and their executives were on trial in Milan from 2018 until 2021 in a linked Italian case. The businesses allegedly paid $1.1 billion in bribes to Nigerian authorities and others through the OPL 245 contract, according to Italian prosecutors.
Last March, a panel of judges acquitted the companies and executives, all of whom denied any wrongdoing. Prosecutors have filed an appeal against the decision.
According to a spokeswoman for the Nigerian government, JP Morgan would be held accountable in the London case.
“JP Morgan was well aware that the payments put its customer, the Federal Republic of Nigeria, at jeopardy of being defrauded, which is exactly what transpired,” he said.
