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Key role of Shell Chairman Malcolm Brinded in OPL 245 Scandal

By John Donovan

Italian prosecutors intend to put Shell Foundation chairman Malcolm Brinded on trial for alleged corruption offences over his key role in the $1.3bn OPL 245 oil block deal. See extracts below from news articles published in the last 48 hours. Such allegations should not come as a surprise to regular visitors to my Shell focussed websites over the last two decades. The headline of an article I published in May 2009 says it all: Royal Dutch Shell Fat Cat Malcolm Brinded: Big Brain but no scruples. I first reached that conclusion nearly 20 years ago.

I warned Brinded on 5 June 1999 about a corrupt Shell tender process for a £1 million contract masterminded by a dishonest Shell executive. Instead of enforcing Shell’s claimed business principles Brinded gave his 100% backing to the relevant executive who awarded the contract to a company who did not participate in the tender. In other words, a horse that did not run miraculously won the race. The relevant Shell executive had a personal relationship with the lucky company in question. Here is my letter plus the two attachments (1) (2). 18 pages which should have triggered an outcry.

Instead, Brinded gave the green light to corruption then and nothing seems to have changed.

I note that Shell internal Counsel Keith Ruddock was also involved. More about that soon.

Brinded’s key role in the OPL 245 scandal: 

Extracts from BuzzFeedNews: How one of the world’s biggest oil firms secured a $1.3 billion deal mired in corruption allegations

Shell executives knew the deal would benefit Malabu by more than $1 billion. In an October 2010 email between senior executives, executive board member Malcolm Brinded outlined the $1.3 billion deal to secure OPL 245, adding the structure “has the advantage that Malabu gets well over $1bln”.

On 11 October 2010, executive director Malcolm Brinded emailed a number of executives with a proposal for the deal structure: Shell would release $210 million from a holding account, the $25 million of accrued interest on that account, and a further $85 million, signed off by the then-chief executive Peter Voser – “getting Peter to agree to put the above $85 mln cash on the table was naturally difficult,” Brinded noted – while ENI would provide the rest.

The headline value of the deal would be $1.3 billion. “Our firm intent is to keep it at this number,” Brinded stated, “which has the advantage that Malabu gets well over $1bln.”

Brinded also noted the new structure “has the support of all including Peter Voser; simon [chief financial officer Simon Henry]”.

Extracts from Premium Times article: What Shell CEO Told Colleague About $1.3 Billion OPL 245 Scandal

On August 23 2010, Mr. Robinson prepared briefing notes for his boss, Shell then head of exploration Malcolm Brinded, ahead of his meeting with his Eni counterpart.

The briefing note, informed by his intelligence on the ground, said: “In country view [from Nigeria] is that the President is motivated to see 245 closed quickly – driven by expectations about the proceeds that Malabu will receive and political contributions that will flow as a consequence – reinforces need for a solution quickly.”

In another briefing document written in the late stages of the negotiations, Mr. Brinded briefed Simon Henry and Mr. Voser about the transaction structure to say: “Eni will pay on behalf of itself and SNEPCo [a Shell subsidiary], an amount of $1.09bln. This will be used by the FGN [Federal Government of Nigeria] to settle all claims from Malabu.”

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