Italian oil service group Saipem has 79 million euros ($101 million) of funds frozen in Algeria in connection with an investigation into allegations of price inflation, the company said. Europe’s biggest oil service group said in its annual report that a number of current accounts belonging to its Saipem Contracting Algerie unit had been frozen after a probe had been launched in 2010. “Some of these were subsequently unfrozen, though two in Algerian dinar, for a total of 79 million euros at Jan. 25, 2013, remain blocked,” the company said in the report. Saipem, 43 percent owned by oil and gas major Eni, is at the centre of investigations alleging it paid bribes to secure a series of contracts in Algeria worth $11 billion. The probe cost the resignation of Saipem’s long-standing chief executive, Pietro Franco Tali, and recently widened to involve the chief executive of Eni, Paolo Scaroni. In the report Saipem said a search of the premises of Saipem Contracting Algerie had been carried out on March 24. The unit is accused of having taken advantage of the influence of representatives of a government-owned company to inflate prices in contracts awarded by that company. Algiers public prosecutor Belkacem Zeghmati recently said he expected investigations into corruption allegations involving state energy company Sonatrach and the Eni group to progress rapidly. At the end of January new management at Saipem shocked investors when it said that margins on its contracts were far lower than expected, prompting it to cut 2012 targets and paint a bleak outlook for 2013.

Source: Reuters