MILAN, April 3 Italian oil service group Saipem
has 79 million euros ($101 million) of funds frozen in
Algeria in connection with an investigation into allegations of
price inflation, the company said on Wednesday.
Europe's biggest oil service group said in its annual report
that a number of current accounts belonging to its Saipem
Contracting Algerie unit had been frozen after a probe had been
launched in 2010.
"Some of these were subsequently unfrozen, though two in
Algerian dinar, for a total of 79 million euros at Jan. 25,
2013, remain blocked," the company said in the report.
Saipem, 43 percent owned by oil and gas major Eni,
is at the centre of investigations alleging it paid bribes to
secure a series of contracts in Algeria worth $11 billion.
The probe cost the resignation of Saipem's long-standing
chief executive, Pietro Franco Tali, and recently widened to
involve the chief executive of Eni, Paolo Scaroni.
In the report Saipem said a search of the premises of Saipem
Contracting Algerie had been carried out on March 24.
The unit is accused of having taken advantage of the
influence of representatives of a government-owned company to
inflate prices in contracts awarded by that company.
The report did not name the company.
Algiers public prosecutor Belkacem Zeghmati recently said he
expected investigations into corruption allegations involving
state energy company Sonatrach and the Eni group to progress
At the end of January new management at Saipem shocked
investors when it said that margins on its contracts were far
lower than expected, prompting it to cut 2012 targets and paint
a bleak outlook for 2013.
($1 = 0.7783 euros)
(Reporting By Stephen Jewkes; editing by Jane Baird)