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.


Aramco chief sees demand for oil staying above 100m barrels

Updated 23 January 2020

Aramco chief sees demand for oil staying above 100m barrels

  • A panel on the global energy outlook at the WEF in Davos heard that renewable energy alone would not be able to meet rising demand for power as more people moved into the middle class
  • The panel also heard that coal, not oil, remained the biggest source of carbon emissions

DAVOS: Aramco CEO Amin Nasser said he expected global oil demand to stay above the 100 million barrels threshold as the rise of the global middle class spurred demand for energy.
A panel on the global energy outlook at the World Economic Forum in Davos heard that renewable energy alone would not be able to meet rising demand for power as more people moved into the middle class.
“There will be additional demand and the only way to meet it is if you continue to provide affordable, reliable and viable energy to the rest of the world,” said the Aramco CEO.
“There is good penetration from renewables and electric cars are picking up however you need to consider what is happening in the world. There are still an additional 2 billion people coming. There are currently 3 billion people using biomass, animal dung, kerosene for cooking and there are 1 billion people today without electricity and almost 50 percent of people have never flown in an aeroplane.”
The panel heard that coal, not oil, remained the biggest source of carbon emissions but that the location of many coal-fired power plants in developing Asian economies meant that reducing its impact was a major challenge.
“The number one source of emissions by far is the coal fire power plants – they alone are responsible for one third of emissions,” said International Energy Agency Executive Director Fatih Birol. “But they are in many cases the number one source of electricity generation in low income countries - so this is not a black and white issue.”