Italy’s Saipem demands from Sonatrach 20,000 billion centimes in compensation

The Italian engineering company Saipem is asking this astronomical sum from the national hydrocarbons company Sonatrach after refusing a de facto amicable agreement in their lingering dispute.

Indeed, the Italian engineering company Saipem launched several international arbitration proceedings against the national hydrocarbons company to demand payment of an aggregate financial amount equivalent to 1 billion and 700 million euros, or 20,000 billion centimes.

And hence Saipem filed a request for arbitration with the International Chamber of Commerce in Paris as part of oil and gas unfulfilled contracts with Sonatrach, covering 4 projects.

To recall, Saipem was not so disturbed in the Sonatrach 1 bribery case and was sentenced to pay only a fine of 34,000 euros and has even secured the release of his bank accounts, worth 1,000 billion centimes, amid the absence of any decision preventing the Italian company from bidding in tenders launched in Algeria.

It is also noteworthy that only the vexed dispute with Sonatrach is evoked in the Saipem financial report of 2015 which outlined all arbitration cases settled out of court, numbering over 25 with other companies worldwide, including 20 which have not yet been decided.

Projects that are concerned by the arbitration are those related to the construction of facilities of Menzel Ledjmet East field (MLE), the achievement of the LDHP plant of Hassi Messaoud and that of the LZ2 LNG pipeline linking Hassi R’Mel to Arzew in addition to the Z3 Arzew project.