Confidential letters show that Chakib Khelil is the “big boss” in deals

According to most of the witnesses who appeared in court, Algeria’s former energy minister Chakib Khelil was the “big boss” at Sonatrach. This confirms remarks made by suspects involved in the Sonatrach 1 case including its former CEO and his deputies.

In the end of the Sonatrach trial’s third week, judge Mohamed Rekad finished hearing 35 witnesses in the first group related to an electronic protection deal. Main witness Mohamed Kerar, internal security director at Sonatrach said he had confidential reports and was consulted in concluding deals.

He told lawyers he submitted monthly reports to the energy minister at that time about the secret of the electronic protection projects. He gave instructions to Sonatrach’s executive council to hold meetings. In 2004, he was appointed as Sonatrach’s internal security director and was assigned by its CEO to follow up electronic protection projects. His task in meetings was to write reports about the running of deals and send them to Sonatrach’s general department and the energy ministry.

He added that the executive council held 10 meetings to follow up those projects. The first meeting was organized late in December 2004 following an instruction from the Prime Minister. The latter stressed the necessity of protecting Sonatrach’s facilities.

Internal security director avoids answering

Mohamed Ferar had already been heard in the beginning of the investigation. He avoided answering the criminal judge’s questions, saying “I don’t know,” “I don’t remember.”

He justified his answers that he was on retirement. Yet, the judge asked him: “how it comes that you do not know while you were in charge of writing reports on deals?”

He answered: “I received reports from officials about the project. I did not know that the sons of Sonatrach’s CEO were involved in the deal.

Secret letters show internal security director’s involvement in protection projects

Lawyers asked the witness about letters he had received from minister Chakib Khelil and others he had sent about the deal.

He was surprised and asked the lawyers to check them before he answered them. Speaking about a letter sent by the minister in January 2005, he said some Sonatrach’s executives avoid following up electronic protection projects due to calls for tender long deadlines.

He also said he was in charge of giving propositions to Sonatrach’s CEO and following up projects.

Sipem’s former General Director: we lost $150 million

SAipem’s former General Director Antonio Calidori said his company respected all its deals with Sonatrach and lost about $150 million.

“We achieved the project with a loss and prices were normal. Saipem was a victim of those prices. The project carries gas at present and it is under exploitation,” he told the judge.

“Did remaining in competition with one single company pushed you to impose prices on Sonatrach?” the judge asked him.

“No, it did not. Otherwise, we would have not lost. We Italians do not accept to throw our money in this way,” he answered.

The judge said witness Yahia Messaoud told him prices were high and were compared to similar deals. Sonatrach bought pipelines and was in charge of security. Sipem had only to achieve the project.

“That’s not true. I have documents. They show that Sipem achieved the deal at a low price,” Sipem’s former General Director told the judge.

Sonatrach’s deputy-CEO in charge of pipelines was asked about that point. He said Yahia Messaoud’s report was wrong.

Tullio Orsi was stupid by employing Mohamed Meziane’s son

The judge said the son of Sonatrach’s CEO Reda Meziane who received 14,000 DZ in return of consultations service for Saipem’s former CEO Tullio Orsi.

According to the Italian witness, Orsi was stupid as he employed the CEO’s son and he did not understand why.

“The law does not forbid that but those things cause trouble. Reda Meziane offered consultation services as part of subcontractors and they had nothing to do with Sonatrach’s deals,” he added.

“You are a great nation. Your people have a great history. How do you explain that Reda Meziane worked as an advisor without having any formal document?” the judge asked him.

He answered: “There is a consultancy contract.”

Asked about 400 million centimes given to Reda Meziane to buy an Audi cat for his wife, he said the company has nothing to do with that.

“The money was not registered in the company’s accounts,” he answered.

He also said Tellio was depressed due to press reports about the scandal. He left Algeria for Dubai. Then, he quitted the company.

The Treasury’s lawyer asked him whether the price presented by Saipem was real.

The witness said the 15 percent discount caused them a big loss. “If we withdrew from the project, we would have lost $2.5 million. Sonatrach is originally a partner and not a client only.”

Asked if his company knew about Chakib Khelil’s order to reduce the price by 12.5 percent, he said “if we knew that, we would not have accepted the 15 percent discount.”