Khelil favored Italian company in a $585 million deal

Pipeline transport officials at Algeria’s energy group Sonatrach told investigators a number of wrongdoings were committed as part of a deal conclusion with Italy’s Saipem.

Sonatrach’s development department director submitted a report to deputy CEO and Algeria’s former energy minister Chakib Khelil. He warned them against the suspicious deal and asked to deal with an Algerian company or negotiate with the Italian group to reduce the bid by 40 percent.

The deputy CEO and Khelil turned a deaf ear to the report following an official letter from Saipem’s CEO Tulio Orsi in April 2009. He promised to reduce the bid by 3 percent equal to $20,659 million.

According to development department director, French SPIE GAPAG bid for the tender along with the Italian company. It told Sonatrach’s deputy CEO it could not continue working on the deal project by itself. It asked for permission to form a joint venture with Lebanese CCC for consultancy services.

This offer was supposed to be rejected because it does not respect laws on deals while the Italian group offered $585 million and won the deal.

Investigations show that Sonatrach’s deputy CEO transmitted the French company’s request to development department director but he kept it and did not send it to the commission in charge of technical bids.

Deputy CEO in charge of pipeline transport told an examining judge he wrote the law on Sonatrach’s deals, saying deputy CEO did not have the right the negotiate with the Italian company about the bid.