The Spotlight Sharpens

In a stark conflict of interest, an appointee of Congolese President Denis Sassou Nguesso headed the committee that awarded the company he founded and reportedly controls valuable interests in four of Eni’s oil licences, Congo’s official journal and Eni’s latest shareholder disclosures reveal.

Congo’s official journal is public, suggesting that Eni either knew about but disregarded this information, or overlooked it – a major oversight in its anti-corruption checks. The arrangement sparked an internal controversy at Eni, which contributed to the resignation of one of its board members.

For over two decades, Global Witness has investigated corruption in deals for natural resources and those we recount here bear many of the hallmarks. Corruption is endemic and enduring in Congo, which is Sub-Saharan Africa’s third biggest oil producer yet one of the most unequal societies in the world. In the past year alone, we have exposed corruption in the oil sector, hidden debt and alleged money laundering by members of the presidential family.

Africa Oil and Gas Corporation (AOGC), the company founded and reportedly controlled by the president’s appointee, Denis Gokana, partnered with Eni as part of the renewal process for four of its expiring offshore oil licences. AOGC had a public record of fraud, payments to companies owned by the president’s son and ties to multiple politically-exposed persons, including Gokana, oil advisor to the president and head of Congo’s national oil company at the time. Gokana sat as president of the committee that awarded AOGC – and only AOGC – the stakes in Eni’s oil licences.

AOGC partnered with Eni just months after it concluded a deal for another oil block with WNR, an unknown shell company whose three representatives at the time had close ties to Eni or its senior executives.

The curious correlation of the timing and parties to these deals may be a coincidence, but we consider this unlikely. Rather, it shows signs of a quid pro quo: 

• AOGC brokered a deal for WNR – a potential front for Eni executives or their immediate family members – in one oil block
• In return, AOGC received a three per cent interest in that block plus more sizeable interests in Eni’s oil licences elsewhere
• Meanwhile, Eni (or its executives) signed off on AOGC’s participation in its four licences, despite the dilution of Eni’s interests and the major corruption risk associated with AOGC

Our latest investigation provides the most detailed public account to date of the deals at the heart of a Milan corruption probe into Eni’s business and choice of local partners in Congo, in which the story’s key protagonists are all under investigation.

We have drawn upon confidential sources, documents from leaks and court cases, and listed companies’ public reporting. After months of research, we have uncovered new information on the transactions, but many questions remain. 

This is a story of conflicts of interest, politically-exposed persons and middlemen, of opaque deals, unknown shell companies and irregular oil licensing procedures – all major red flags for corruption. Its tentacles touch Italy, Congo, Mauritius, and the UK and its opaque overseas territories.

The story exposes a stark conflict of interest among the highest echelons of power in Congo and raises serious questions about Eni’s role therein. It calls into question the adequacy of Eni’s due diligence systems, which appear either to have been disregarded or are simply not fit for purpose.

As Eni faces corruption probes on multiple fronts, our revelations add to the storm clouds gathering over the company’s business model and connections to power around the world. Eni, AOGC and WNR’s deals merit full and thorough investigation by authorities in Italy, Congo and other relevant jurisdictions.

More broadly, the story sheds light on the operations of Big Oil and the lengths to which multinational companies like Eni will go to secure access to resources overseas. It provides a scathing account of the mismanagement of Congo’s oil wealth, which for five decades has failed to translate into prosperity for its people.

Read the full investigation here.

Credit for banner image:  Alessandro Bianchi/Reuters