Saipem will challenge an Algerian conviction connected to a liquefaction project, with the Italian company denying the allegations against it.
The Algiers Court of Appeal ruled yesterday that Saipem – and Saipem Contracting Algerie and Snamprogetti Algeria Branch – were connected to two charges. The company is said to have obtained a contract for more than the correct value and with false custom declarations.
Algeria has sent two former Saipem employees to prison, for five and six years, while a third employee was acquitted. It levied a fine of 199 million euros ($208mn).
The Court of Algiers provided a first ruling on the case in February this year.
Saipem said it had not received an explanation for the appeal court ruling. It also said the Italian authorities had scrutinised the contract in question, a 2008 award on the GNL3 Arzew project, and acquitted Saipem.
The appeal suspends 60mn euros ($62.8mn) of the amount demanded by the court. The remaining sum is enforceable despite the appeal.
Saipem launched its appeal against the initial ruling in February and the first hearing took place in May.
Sonatrach awarded the contract to the Saipem units in 2008. The Algerian authorities summoned the three units of Saipem in October 2019.
The Italian contractor, in its annual report which sheds further light on the charges, said the investigation involved 38 people. These included a former Algerian minister of energy, Chakib Khelil, in addition to various Sonatrach and customs officials.
Saipem flagged that the Italian proceedings had approved it and that it had reached a settlement with Sonatrach in February 2018. This agreement saw the two companies saying they would end litigation on the construction of the LNG train, in addition to various other contracts.
The appeals court also reaffirmed former minister Khelil’s sentence. The court in February sent him to prison for 20 years. Khelil left Algeria amid the fall of the Abdelaziz Bouteflika in 2019. He is believed to be living in the US and has a US passport.
A former head of Sonatrach, Mohamed Meziane, was given a five-year sentence and his deputy, Abdelhafidh Feghouli, received six years.