Royal Dutch Shell has confirmed reports that it knew some of the payments it made to the Nigerian government would go to Malabu Oil and Gas.

The firm is associated with a former Nigerian oil minister and convicted money launderer, Dan Etete.

Shell spokesman, Andy Norman said the group had known the Nigerian government "would compensate Malabu to settle its claim on the block".

Shell previously had said that its payments from the 2011 deal went only to the Nigerian government. In an email to Reuters, Norman said that while Shell knew that former oil minister Dan Etete was "involved" with Malabu, it had not confirmed that he controlled the company.

Etete was convicted of money laundering in a separate case in France in 2007. Attempts to contact Etete have been unsuccessful.

"Over time it became clear to us that Etete was involved in Malabu and that the only way to resolve the impasse through a negotiated settlement was to engage with Etete and Malabu, whether we liked it or not," Norman said.

Norman added that the company believes the settlement was a fully legal transaction with the Nigerian government.