Italian Vineyard May Hold Clues in Eni Bribery Probe

Source: Reuters 3/6/2013, Location: Africa

An Italian investigation into suspected bribery by workers at energy firm Eni and its Saipem unit to secure Algerian oil and gas industry contracts has led prosecutors to a vineyard outside Naples part owned by two central figures in the case, judicial sources say.

According to a February 6 warrant to search homes and offices of executives of Eni and Saipem, stakeholders in the agricultural business include Pietro Varone, former chief operating officer of Saipem's engineering arm, and Farid Noureddine Bedjaoui, a 43-year-old French national born in Algeria.

There is no evidence to suggest there is anything illegal about the vineyard business. But the judicial sources say they are keen to understand more about the two men's financial relationship and whether money paid into the vineyard included siphoned off Eni and Saipem funds.

Efforts to contact Bedjaoui and Varone were unsuccessful.

The inquiry into Eni and Saipem, coinciding with separate cases of alleged wrongdoing at Italy's Monte dei Paschi di Siena bank (BMPS.MI) and defence group Finmeccanica (SIFI.MI), has soured Italians' perceptions of an elite many accuse of personal enrichment in times of national hardship. That mood fed into a backlash against established parties in Italy's election.

In the February 6 warrant, prosecutors set out their suspicions.

Bedjaoui is suspected of channelling nearly 198 million euros in bribes to officials in Algeria via a company called Pearl Partners Limited for eight contracts totalling $11 billion awarded to Saipem, Europe's biggest oil services company, between 2007-9, the warrant says.

The warrant says that Varone was one of Eni and Saipem's main interlocutors with Bedjaoui.

According to investigation documents reviewed by Reuters, Pearl Partners was registered in Hong Kong at the time of the alleged payments and managed by a subsidiary in Fujairah, the United Arab Emirates. An agency that registers firms in Fujairah said Pearl Partners was wound up in 2010 and none of its documents were publicly available.

The Feb 6 warrant alleges Varone recommended Pearl Partners to the Saipem board to advise on Saipem's business activities in Algeria and the Middle East.

Varone was one of several senior managers at Saipem and Eni to resign in December as a result of the investigation. Eni and Saipem have denied wrongdoing.

Eni, Italy's largest company in terms of market value, is the biggest foreign energy operator in Africa. It has operated in Algeria since 1981 and has extensive gas interests there.

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