Halliburton and Saipem pay penalties in Nigerian bribery probe

Helen Wright

22 December 2010

Saipem Group and Halliburton have agreed to pay criminal fines totalling US$ 67.5 million to resolve an investigation into a consortium of construction firms which bribed Nigerian government officials in order to win construction contracts worth over US$ 6 billion on the Bonny Island LNG facilities.

Saipem Group subsidiary Snamprogetti Netherlands agreed to pay a criminal penalty of US$ 30 million plus US$ 2.5 million legal costs, while Halliburton - former parent of construction firm KBR, which had a 25% stake in the bribery consortium - agreed to pay US$ 32.5 million plus an additional US$2.5 million for legal costs.

The settlements are non-prosecution agreements with the federal government of Nigeria, and come on top of the US$ 1.28 billion that the four-company consortium has so far been fined for using bribery to secure the lucrative liquefied natural gas (LNG) contracts.

The other members of the consortium, known as TSKJ, were Technip, and JGC.

Under its agreement with the Nigerian authorities, Halliburton said it would provide assistance to help recover funds frozen in a Swiss bank account of a former TSKJ agent.

Snamprogetti was sold by its former parent Eni to Saipem in 2006, two years after the consortium's activities are said to have wound down. Eni agreed to indemnify Saipem for losses resulting from the criminal investigations into the Bonny Island contracts, and as a result Saipem said the settlement will not impact its balance sheet.

The news comes just weeks after former commercial vice president of KBR (UK) Wojciech Chodan admitted paying bribes to Nigerian government officials, including top-level executive branch officials, in order to obtain and retain the Bonny Island contracts.

Mr Chodan, who was extradited to the US on 3 December, pleaded guilty to conspiring to violate the Foreign Corrupt Practices Act on 6 December, according to the US Department of Justice.

He faces up to five years in prison when he is sentenced on 22 February 2011.
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