Eni issues fraud complaint over suspect Iraqi shipment

The logo of Italian energy company Eni is seen at a gas station in Rome, Italy. (Reuters/File)
Updated 18 July 2019

Eni issues fraud complaint over suspect Iraqi shipment

  • Italian oil multinational asks if rejected tanker cargo contained Iranian crude targeted by US sanctions

LONDON: Eni has filed a fraud complaint against its former head of oil trading over a suspect Iraqi crude oil shipment, amid concerns inside the Italian oil major that the failed delivery may have included Iranian crude targeted by US sanctions.

In the filing to the Milan prosecutor’s office, Eni accused its former head of trading and operations, Alessandro Des Dorides, of misleading all parties to the deal and hiding the role of a small Italian oil trading firm, Napag.

Two other senior employees were either demoted or suspended as a result of the failed shipment, sources said.

Eni said it had suspended dealings with Napag in February over a separate investigation by Milan prosecutors into suspected obstruction of justice by members of Eni’s former legal team.

Eni said that it fired Des Dorides at the end of May, after he had been in his job about six months, for what it said was an unrelated petrochemical deal with Napag in 2018.

Napag did not respond to an emailed request for comment or answer phone calls.

Des Dorides did not respond to several requests for comment from Reuters via email or LinkedIn. Reuters could not locate legal representation for him.

Eni also declined to comment. Eni said it “does not comment on ongoing investigations and internal due processes.”

The crude arrived aboard the White Moon tanker at the end of May for offloading at the Milazzo refinery in Sicily, which is part-owned by Eni. The Italian oil major, which produces oil in Iraq and is a regular buyer of Iraqi crude, was solely responsible for the cargo.

However, Eni said it rejected the delivery because it did not match the Iraqi Basra Light crude it expected from its counterparty, the Dubai-based trading arm of Nigerian firm Oando.

After sitting offshore for three weeks, the White Moon sailed back to the Gulf. The tanker manager did not respond to a request for comment.

Two sources at Eni said the White Moon’s 1 million barrel cargo created panic within the company over fears the crude could be, at least partially, Iranian.

Handling Iranian oil would have breached sanctions the US reimposed or extended last year after quitting a nuclear deal between Iran and world powers.

Washington aims to reduce Iran’s exports to zero and force the Islamic Republic to renegotiate that nuclear deal, curb its missile program and modify its behavior in the Middle East.

Iran has called on other parties to the accord to shield it from the effects of US sanctions and has sought to circumvent US restrictions by selling more of its oil undercover.

Following the rejection of the White Moon shipment in June, the head of the Italian Senate Industry Committee wrote to Eni Chief Executive Claudio Descalzi to clarify the origin of an oil cargo labelled as coming from Iraq, the head of the committee said.

The head of the committee declined to comment to Reuters on the oil’s possible origins.

Eni said it bought the crude from Nigerian firm Oando, who in turn bought the oil from the London branch of Italy’s Napag.

Oando said it took back the cargo from Eni, but declined to comment further on the origins of the cargo as it was “in the middle of a resolution” over the rejected oil. Oando said the terms of the deal were “normal for the trading industry.”

Italian prosecutors cannot legally comment on any investigation unless there is an exceptional circumstance.

Trading sources familiar with the deal said the offer terms for the crude should have raised alarms internally even before its arrival off Sicily. The offer was at a significant discount to typical Iraqi trades, was paid for in euros and was from a firm that is new to the region, they said. Physical oil is commonly traded in dollars.

Eni said that the mismatch in the crude’s chemical composition “coupled with other red flags led to the decision to terminate the transaction.”

The oil loaded onto the White Moon came via two ship-to-ship transfers that makes the origin harder to track, sources said.

The crude bought from Oando was loaded onto the White Moon from another vessel, the New Prosperity, but that vessel itself had been loaded with oil from a third tanker, the Abyss.

The Abyss makes regular voyages through the Mideast Gulf with its transponder switched off for days at a time, according to Refinitiv Eikon ship tracking. The transponder was switched off between April 24 and May 3 when it transferred oil to the New Prosperity.


Indonesia hails ‘historic’ $22.9bn mega-investment deal with UAE

Updated 17 January 2020

Indonesia hails ‘historic’ $22.9bn mega-investment deal with UAE

  • Leaders agree initial $6.8bn projects plan, including initiative to build a replica of Abu Dhabi grand mosque in Java

JAKARTA: Indonesia’s business community on Thursday welcomed the UAE’s pledge to pump tens of billions of dollars into a wide range of key sector projects.

President Joko Widodo and his entourage secured an overall $22.9 billion deal during an official two-day visit to Abu Dhabi earlier this week covering the fields of energy, logistics, port construction, mining, and agriculture.

It was also revealed that the delegation brokered a UAE commitment to assist in establishing an Indonesian sovereign wealth fund.

At a bilateral meeting, the Indonesian leader and the Crown Prince of Abu Dhabi Sheikh Mohammed bin Zayed Al-Nahyan witnessed the signing of 11 business accords between the two countries. Indonesia’s Minister for Foreign Affairs Retno Marsudi said the UAE had committed to investing $6.8 billion out of the total agreed spending package into the initiatives.

Luhut Pandjaitan, Indonesia’s chief minister for maritime affairs and investment, described the UAE’s pledges as possibly being “the biggest deals in Indonesia’s history, secured with the UAE within only six months,” referring to the crown prince’s visit to Indonesia last July.

While most lauded the deal, some Indonesian business leaders remained cautious over the long-term prospects for the projects.

Fachry Thaib, head of the Middle East Committee and OIC at the Indonesian Chamber of Commerce, said the schemes could trigger a wide-ranging domino effect through job creation and other business ventures.

“The government needs to have a strong lobbying team that can follow up these deals and push them into investment realizations. We have had such commitments from other Gulf countries, but there was no further lobbying and the pledges were hardly realized,” he told Arab News.

Zaini Alawi, a businessman who exports and imports between Indonesia and the Middle East, said: “It would set a good precedent to attract other Gulf countries to invest here if Indonesia shows it could aptly manage these investment deals.”

Director for Middle East affairs at Indonesia’s Foreign Ministry, Achmad Rizal Purnama, told Arab News that the $6.8 billion commitment from the UAE was only the first phase of a long-term program.

Widodo and the crown prince also witnessed the signing of five government cooperation agreements in health, agriculture, Islamic affairs, and counterterrorism.

Indonesian Minister of Religious Affairs Fachrul Razi said one of the main aspects of the cooperation agreement would be the promotion of religious moderation and raising awareness of the dangers of extremism.

FASTFACT

The UAE has pledged to assist in establishing an Indonesian sovereign wealth fund.

Noting that the UAE had pledged to fund the construction of a replica of the Abu Dhabi grand mosque in Solo, the president’s hometown in Java, the minister pointed out that the grant was part of a commitment by the two countries to establish a mosque that welcomed all people and served a pivotal role in promoting the middle path of Islam.

Riza Widyarsa, a Middle East expert at the University of Indonesia, told Arab News that the cooperation deal could help more Indonesians to understand that not all countries in the Middle East observed conservative Islam. “They are also very active in countering religious extremism and radicalism,” he said.

In addition to the multi-billion-dollar projects, Purnama said Indonesia had also secured the UAE’s commitment to assist in establishing an Indonesian sovereign wealth fund into which the UAE, the US International Development Finance Corporation, and Japan’s SoftBank would inject funding.

And according to Pandjaitan, the UAE had pledged to be “the biggest contributor” to the fund.

The fund would be used to finance Indonesia’s ambitious infrastructure development projects and the construction of its proposed new capital in East Kalimantan, a relocation that has been estimated to cost $33 billion and of which Indonesia could only afford 19 percent.

He said all parties involved would meet in Tokyo soon to set up the structure of the fund and to finalize the plan, which the government expected to launch by mid-2020, a year after the crown prince proposed the idea to Widodo.

“This could be the first time that big capitalists work together in a single project,” Pandjaitan added.