Royal Dutch Shell (LON:RDSA) is facing a legal challenge as the Nigerian government filed a $1.1-billion lawsuit against the company and Italy’s Eni, as reported by Reuters. The move relates to an oilfield deal in 2011.
Shell’s share price has fallen into the red in today’s session, having given up 0.43 percent to 2,331.00p as of 09:05 GMT. The stock, however, is outperforming the broader market selloff which has seen the benchmark FTSE 100 index give up 1.09 percent to 6,802.82 points so far today. The group’s shares have lost more than three percent of their value over the past year, as compared with about an 8.7-percent drop in the Footsie.
Shell faces legal challenge
Reuters reported yesterday that the Nigerian government had filed a $1.1 billion lawsuit against Shell and Eni in a commercial court in London over the OPL 245 oilfield deal. The case relates to payments made by the companies to get the oilfield licence in 2011.
“It is alleged that purchase monies purportedly paid to the Federal Republic of Nigeria were in fact immediately paid through to a company controlled by Dan Etete, formerly the Nigerian minister of petroleum, and used for, amongst other things, bribes and kickbacks,” Nigeria said, as quoted by the newswire. “Accordingly, it is alleged that Shell and Eni engaged in bribery and unlawful conspiracy to harm the Federal Republic of Nigeria and that they dishonestly assisted corrupt Nigerian government officials.”
Reuters also quoted Shell as saying that “the 2011 settlement of long-standing legal disputes related to OPL 245 was a fully legal transaction with Eni and the Federal Government of Nigeria, represented by the most senior officials of the relevant ministries”.
Analysts on FTSE 100 group
Credit Suisse reiterated its ‘outperform’ rating on Shell this week, while Morgan Stanley continues to see the company as an ‘equal weight’. According to MarketBeat, the Anglo-Dutch oil major currently has a consensus ‘buy’ rating and an average price target of 2,943p.