Oil Report

UPDATE 3-Technip sets aside $335 mln for Nigeria bribes case

* Takes 245 mln euros Q4 charge for TSKJ Nigeria case

* Case involves several other firms

* Centres around $6 billion Bonny Island contracts

* Shares down 3 percent

(Recasts, adds details on the bribery case)

By Dominique Vidalon and Marcel Michelson

PARIS, Feb 12 (Reuters) - French engineer Technip TECF.PA set aside 245 million euros ($335 million) for possible fines resulting from a Nigeria bribery case involving several companies that could lead to one of the highest ever bribery settlements.

The group said on Friday it had cooperated with the United States Securities and Exchange Commission and the United States Department of Justice in their investigation into the matter that also involves a former unit of Halliburton Co HAL.N.

The case centres around the payment of bribes on behalf of a consortium relating to a $6 billion liquified natural gas (LNG) project at Bonny Island near the Niger Delta.

The bribes -- some delivered in a briefcase stuffed with $100 bills -- were paid to officials in Nigeria’s executive branch as well as state-owned Nigerian National Petroleum Corp, the U.S. Justice Department has found.

U.S. authorities in 2004 began a probe into the TSKJ consortium -- comprising Japan's JGC Corp 1963.T Italy's Snamprogetti, KBR Inc KBR.N (formerly part of Halliburton) and Technip -- in relation to allegations of bribery in the construction of the Nigerian LNG facilities.

Technip has a 25 percent stake in TSKJ.

KBR admitted last year to paying bribes for the consortium to secure contracts for the Bonny Island LNG project. [ID:nN26370555]

Britain’s Serious Fraud Office is considering civil claims or criminal prosecution in the Nigerian bribe scheme after it investigated a UK-based KBR unit, M.W. Kellogg Ltd.

Halliburton, which indemnified KBR for some past liabilities when the companies split in 2007, said in October findings of UK law violations could result in “fines, restitution and confiscation of revenues, among other penalties, some of which could be subject to our indemnification obligations.”


The scheme involved money wired through banks in Amsterdam and New York to accounts in Switzerland and Monaco and KBR used shell companies in Portugal in an effort to avoid breaking U.S. laws, the U.S. government said.

Halliburton has said it is also aware of the Bonny Island investigations in France, Nigeria and Switzerland.

KBR and Halliburton agreed with the Justice Department to pay a $402 million fine, with Halliburton paying $382 million. Halliburton agreed with the Securities and Exchange Commission to disgorge $177 million in profits to settle parallel criminal charges that KBR violated the Foreign Corrupt Practices Act.

The SEC has said the $579 million is the highest combined settlement ever paid by U.S. companies under the FCPA. German engineering conglomerate Siemens SIEGn.DE paid $800 million to U.S. officials to settle claims that it violated the act.

An Italian prosecutor is also probing the case and tried to block oil major ENI ENI.MI and its Saipem unit, which acquired Snamprogetti in 2006, from conducting business with Nigerian National Petroleum Corp (NNPC), but a Milan judge rejected the request in November.

French authorities have been on the case since 2003.

“The potential resolution does not contemplate a criminal conviction for Technip’s role in the TSKJ joint venture. Although the amount to be paid is substantial, Technip will continue its global business in a normal manner,” it said.

Technip said it would take the one-off 245 million euros charge on its results for the last quarter of 2009, corresponding to the “estimated costs of the resolution of all potential claims against the company”.

Analysts at brokerage CM-CIC said: “The provision ... is higher-than-expected and may prompt a negative market reaction short-term, but it also puts past problems behind.”

By 1117 GMT, Technip shares were off 3.1 percent at 50.57 euros. Technip, which unveils 2009 earnings on Feb. 18, said its operating performance was above expectations in the last quarter and the full-year result would top its most recent guidance. (Editing by David Holmes) ($1=.7314 Euro)