{"id":595876,"date":"2019-03-02T17:06:14","date_gmt":"2019-03-02T17:06:14","guid":{"rendered":"
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Royal Dutch Shell Plc<\/span>\u00a0is facing prosecution in the Netherlands over a license in Nigeria, intensifying its legal troubles from a transaction that has dogged the company for years.<\/span><\/span><\/span><\/p>\n

\u201cWe have been informed by the Dutch Public Prosecutor\u2019s Office that they are nearing the conclusion of their investigation and are preparing to prosecute,\u201d The Hague-based Shell\u00a0said\u00a0Friday. <\/span><\/span><\/span><\/p>\n

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The case is related to the 2011 settlement of disputes over Oil Prospecting License 245 in the Gulf of Guinea.<\/span><\/span><\/span><\/p>\n

The transaction is already the subject of a separate criminal trial in Milan, where prosecutors allege the 2011 deal was tainted by corruption. They have said at least part of a $1.1 billion payment Shell and partner\u00a0Eni SpA<\/span>\u00a0made to settle charges around the license was converted into bribes. Nigeria is also\u00a0suing\u00a0the oil companies in London.<\/span><\/span><\/span><\/p>\n

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Shell and Eni have previously denied any wrongdoing in the OPL 245 case. They have said they paid into a legitimate government account to settle legal claims related to the block.<\/span><\/span><\/span><\/p>\n

While an additional trial raises the risk of financial penalties for Shell and brings the details of its work in Nigeria into focus for its shareholder base in the Netherlands, the news didn\u2019t immediately disturb investors. Shell\u2019s B\u00a0shares\u00a0in London rose slightly at the start of trading on Friday.<\/span><\/span><\/span><\/p>\n

\u201cThere is a small segment of the investing community that is concerned with it, but for the most part when I meet with investors it doesn\u2019t come up,\u201d said Jason Gammel, an analyst at Jefferies LLC. This license already \u201cdoesn\u2019t generate any profit.\u201d<\/span><\/span><\/span><\/p>\n

Gammel said he doesn\u2019t include the OPL 245 license when considering Shell\u2019s future cash flows, and investors are more concerned with things that can affect near-term profit. <\/span><\/span><\/span><\/p>\n

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The company could face fines in multiple jurisdictions, but those are likely to be easily absorbed by Shell\u2019s large size.<\/span><\/span><\/span><\/p>\n

Shareholders with tight environmental, social and governance restrictions are likely to be well aware of the scrutiny over Shell\u2019s Nigeria activities. <\/span><\/span><\/span><\/p>\n

The trial in Milan started in\u00a0June\u00a0last year, with the court already procuring two\u00a0guilty verdicts\u00a0against defendants opting for \u201cfast-track\u201d proceedings.<\/span><\/span><\/span><\/p>\n

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The main claim in the case is that the companies improperly settled long-standing disputes over the OPL 245 license. The permit had originally been awarded in 1998 by Nigeria\u2019s military dictator, Sani Abacha, to Malabu Oil & Gas Ltd., a Lagos-based company connected to then-Petroleum Minister Dan Etete. <\/span><\/span><\/span><\/p>\n

Under successive governments, the license was canceled, awarded to Shell, and then awarded to Malabu again before the 2011 deal.<\/span><\/span><\/span><\/p>\n

The Milan prosecutors allege that Shell and Eni paid almost $1.1 billion into an escrow account for the Nigerian government, from which about $800 million was later transferred to Malabu to be distributed as payoffs.<\/span><\/span><\/span><\/span><\/p>\n

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