* Saipem having problems cashing payments in Algeria
* Algerian court probe into corruption has widened
* Confirms revised 2013 targets
(Adds contract payment concern, comments by management,
MILAN, April 23 Italian oil services group
Saipem could lose up to 500 million euros ($652
million) in payments due from Algeria because of a probe into
allegations that it paid bribes to win contracts there, the
company said on Tuesday.
"We are having some difficulties to get recent payments and
the worst-case scenario is we won't get these payments," Chief
Executive Umberto Vergine told analysts.
Europe's biggest oil service group is embroiled in judicial
investigations in Italy and Algeria that claim it paid bribes to
secure a series of contracts in the North African country worth
The probe, which prompted former long-standing Saipem CEO
Pietro Franco Tali to resign in December, has spread to include
Paolo Scaroni, the chief executive of oil major Eni
which owns 42 percent of Saipem.
Saipem and Scaroni have denied any wrongdoing.
Saipem said it had been informed that an Algerian court had
extended its investigations, but added it had no details on the
state of the case or the people involved.
"We have no timeline on Algeria. We are totally blind on the
probe," Vergine said.
Both Eni and Saipem have important contracts in Algeria
which is one of Italy's major suppliers of natural gas. Italy
generates more than half of its electricity from gas.
Some analysts are concerned the probe could lead to a fine
for Saipem. In a recent note Nomura said previous cases of this
nature had pointed to penalties worth up to 10 percent of total
"We have not identified any reason to indicate that the risk
(of a fine) exists," Vergine said, reiterating the group had not
made any provisions for such an eventuality.
At 1510 GMT Saipem shares were down 2.2 percent while the
European oil and gas index was up 1.74 percent.
Earlier on Tuesday Saipem said its operating profit in the
first quarter had fallen 45.8 percent to 202 million euros ($263
The company shocked markets at the end of January when it
suddenly slashed its profit forecasts for 2013, blaming lower
margins on new contracts. Its shares have since slid more than
"We don't expect consensus (forecasts) to move up for 2013
and with a rather cautious near-term macro outlook, concerns
over 2014 could increase," a London-based oil analyst said.
Saipem has said it expects operating profits to halve to 750
million euros this year but has not provided any specific
targets for 2014. It is scheduled to present a strategic review
of its businesses on Wednesday.
(Reporting By Stephen Jewkes; Editing by Greg Mahlich)