Sonatrach’s Canadian business on trial – Jeune Afrique

Wednesday, December 15 that, unless further postponed, the three steps of the trial of Sonatrach should open in the court of Algiers, Sidi M’Hamed. After a long investigation, the investigating judge of the first chamber of the economic and financial center decided to send for judgment a file combining the case of Brown & Root-Condor (BRC), a subsidiary of Sonatrach which created in partnership with the American company Halliburton, and that is linked to the Canadian company SNC-Lavalin.

The common denominator of these two cases: the involvement of the former general manager of BRC and Sonatrach, Abdelmoumen Ould Kaddour, extradited in June 2021 from the United Arab Emirates and sentenced in November 2022 to fifteen years in prison by the Algerian court in the case of takeover of the Augusta refinery, and of the former Minister of Energy Chakib Khelil, who ran in the United States, who was sentenced, in June 2022, to 20 years in prison within the framework of Sonatrach 2 , for seven contracts with tainted with corruption, think justice, that Saipem (subsidiary of ENI) acquired from the oil group Sonatrach between 2007 and 2010.

Upstream, there have there was the Sonatrach 1 affair, specifically related to the equipment market for all the country’s gas complexes won by the Algerian-German group Contel Funkwerk and the renovation of Sonatrach’s headquarters, which resulted in the imprisonment of its CEO in at that time, Mohamed Meziane .

Brown and Root-Condor in sights

Suspicions of corruption weigh on these contracts, but the name of Khelil, who has been in the post for ten years at the head of the Ministry of Energy, is not mentioned once, no doubt thanks to his departure from the government. in May 2010 following accusations of embezzlement against senior Sonatrach executives.

Since 2006, suspicions of corruption have also prompted the authorities to scan 13 contracts obtained at the BRC counter, up to 7 billion dinars, according to a report by the General Inspectorate of Finance. Specialized in oil engineering and created in 1994 with a share capital of more than 300 million dinars – and the giant Sonatrach held 51% of the shares against 49% for the American company Halliburton –, BRC was dissolved in 1995. The IGF report is put under the elbow and the case is closed until its revival in 2019.

The contracts relate to the construction of an Olympic swimming pool in Hydra, two towers of the Chaabani residence, the oil club in Zéralda, the redevelopment of several guest villas in Oran and Djanet, and the training center of Arzew, as well as others . projects in the field of transportation, health, public works, which for all these projects are estimated additional costs between 185% and more than 400%.

Serial overcharges

For example, according to the court file, the invoice presented by the BRC to the management of Sonatrach for the construction of the metal structure of the Olympic swimming pool, in the amount of 272 million dinars, was overstated by 436%. The only invoice related to labor was inflated by 300%.

The IGF report also shows that BRC invoiced Sonatrach for software installation for 357 million dinars, without providing documents justifying this cost. Of the is the crazy was spent by Sonatrach to pay for the furniture of the two towers housing the headquarters of the Ministry of Energy: 64,500 euros for an imported dining room and some pillows.

Initially worth 124 million dinars, the success of the Zéralda oil club was finally revised upwards of 60%. The IGF report states that “the method of mutual agreement was authorized, under the seal of urgency, while the nature of these projects did not justify it”.

The implementing regulations allow the use of mutual agreement only when the call for tenders proves unsuccessful in some cases or if an emergency requires it. Added to this, we note, is the “poor quality of some projects and failure to meet delivery deadlines”.

Board meeting at the expense of the princess

The investigation also looked into the payment, in foreign currency, of three BRC board meetings abroad, one in the United States and two in Great Britain, in the presence of a large delegation of executives and guests.

The second case to be judged in this same trial on December 15 is related to the contract awarded to the Canadian engineering giant SNC-Lavalin for the construction of a gas complex in Hadjret Ennous (Tipaza) at a cost of almost 1 billion dollars. In this case, the former Minister of Energy Chakib Khelil, in the running, the former CEO of Sonatrach Mohamed Meziane (in detention) and its former president Mohamed Feghouli (in detention) are accused of embezzlement of public funds, corruption at the end of the public contract and abuse of office.

This contract – revealed in 2016 during the so-called “Panama Papers” leak – became the subject of a judicial investigation in Canada for suspicion of corruption by SNC-Lavalin in the procurement of contracts in Africa, including Algeria . Instruction that led to the conviction of Algerian-Canadian Farid Bedjaoui, henchman of Chakib Khelil and mediator between Sonatrach and SNC-Lavalin. Further prosecution in the Saipem case, especially for the payment of several bribes, Farid Bedjaoui was sentenced in September 2018 by the court of Milan to five years of prison.