Eni and Saipem investigated for Algerian contracts

Eni has confirmed that prosecutors in Italy have extended their investigation into alleged corruption involving oil and gas contractor Saipem, in which it is a majority shareholder, to include Eni and its CEO.

In November last year, the Prosecutor for Milan notified Saipem that it was investigating corruption in connection with contracts in Algeria, prompting the resignation of Saipem CEO Pietro Franco Tali and Alessandro Bernini, chief financial officer at parent company Eni.

According to Italian investigators, the alleged corruption took place up to 2009 in connection with unspecified contracts in Algeria.

Reports suggest the contracts under investigation are worth US$ 11 billion, and include the Medgaz natural gas pipeline connecting Algeria and Spain, and another contract for the Menzel Ledjmet East (MLE) oil and gas field in Algeria – both of which were awarded by Algerian state-owned energy company Sonatrach.

In a statement, Eni said its directors and managers had no involvement in Saipem’s activities in Algeria.

“Eni acknowledges that the prosecutor has decided to extend the investigation to include Eni and its CEO. Eni and its CEO declare themselves totally unrelated to the object of investigation,” it said.

When the investigation first came to light in November, Eni recommended that Saipem run an internal audit and co-operate with the judiciary.

Eni said these actions had led to “the resignation and dismissal of different senior management roles involved in Saipem’s activities under investigation. Eni has also directly provided, and will continue to provide, full co-operation with the prosecutor’s office.”

Eni owns a 43% stake in Saipem.