French, Brazil units of Italy's Saipem hit with Petrobas probe

French, Brazil units of Italy's Saipem hit with Petrobas probe
Saipem is an Italian EPC company.
Published: 2 June 2019 - 11 a.m.
By: Jack Ball

Brazilian authorities have opened administrative proceedings into loss-making Italian engineering, procurement, and construction (EPC) contractor Saipem in relation to a $63.4m Petrobras contract it won eight years ago in Brazil.

In a statement on 30 May, the firm said Brazilian administrative authority Controladoria-Geral da União informed the group’s French and Brazilian subsidiaries, respectively Saipem S A and Saipem do Brasil, about the proceedings.

The contract in question was awarded to Saipem in December 2011 by state-owned oil giant Petrobas, for which Saipem was the leader of 'Consortium BMS 11'.

The contract pertained to the installation of an underwater gas pipeline connecting the Lula and Cernambi fields in the Santos Basin, located 300km southeast of Santos in Brazil.

Saipem said both its French and Brazilian businesses would “cooperate in the administrative proceedings by providing all the clarifications requested by the competent administrative authority”.

The group expressed its confidence in the “correctness of the award” and in the “absence of circumstance to affirm the administrative liability of the companies”.

This is not the first time the Milan-based oil and gas services firm has faced corruption allegations.

January 2019 saw prosecutors in Milan launch an investigation into Saipem's chief executive officer and two managers over allegations of false accounting and market manipulation between 2015 and 2017.

The probe was started by Italy’s National Commission for Companies and the Stock Exchange, commonly called Consob, a government stock market regulator, in 2018.

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