This Thursday should open the trial of the third part of the sprawling Sonatrach affair in Algiers. In the question: the Canadian alliances of the hydrocarbon giant.
It is Thursday, December 15 that, unless further postponed, act three of the Sonatrach trial must open in the Algerian court Sidi M’Hamed. After lengthy investigations, the investigating judge of the first chamber of the economic and financial center decided to transmit for judgment a file bringing together the Brown & Root-Condor (BRC) case, a subsidiary of Sonatrach created in partnership with the company American Halliburton, and that link to the Canadian company SNC-Lavalin.
The common denominator of these two cases: is the involvement of the former general manager of BRC and Sonatrach, Abdelmoumen Ould Kaddour, deported in June 2021 from the United Arab Emirates and sentenced in November 2022 to fifteen years in prison by the Algerian courts in the case of the takeover of the Augusta refinery, and of the former Minister of Energy Chakib Khelil, on the run in the United States, who was already sentenced, in June 2022, to 20 years in prison within the framework of Sonatrach 2, for seven contracts tainted with corruption, think justice, obtained by Saipem (a subsidiary of ENI) from the oil group Sonatrach between 2007 and 2010.
Upstream, there was the Sonatrach affair 1, which relates in particular to the equipment market for all the country’s gas complexes won by the Algerian-German group Contel Funkwerk and the renovation of the Sonatrach headquarters which resulted in the imprisonment of its CEO at the time, Mohamed Meziane.
Brown & Root-Condor in the sights
Suspicions of corruption weighed on these contracts, but the name of Khelil, already in post for ten years at the head of the Ministry of Energy, is not mentioned once, undoubtedly thanks to his departure from the government. in May 2010 following accusations of embezzlement against senior Sonatrach executives.
From 2006, suspicions of corruption also prompted the authorities to scan 13 contracts obtained over the counter by BRC, 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 whose giant Sonatrach held 51% of the shares against 49% for the American company Halliburton –, BRC was dissolved in 1995. The report of the IGF is put under the elbow and the case closed until its resurrection 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 other projects in the fields of transport, health, public works, with for all these projects additional costs estimated between 185% and more than 400%.
Serial overcharges
For example, according to the court file, the invoice presented by 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, would have been overstated by 436%. The only invoice relating to labor being inflated by 300%.
The IGF report also shows that BRC invoiced Sonatrach for the installation of software for 357 million dinars, without providing the documents justifying this cost. Crazy sums were spent by Sonatrach to pay for the furnishing of the two towers housing the headquarters of the Ministry of Energy: 64,500 euros for an imported dining room and a few pillows.
Initially valued at 124 million dinars, the achievement of the Zéralda oil club was finally revised upwards by 60%. The IGF report states that “the mutual agreement method was authorized, under the seal of urgency, while the nature of these projects did not justify it”.
The regulations in force only allow the use of mutual agreement when the call for tenders proves to be unsuccessful on several occasions or if an emergency requires it. Added to this, we note, is the “poor quality of certain 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 that will be judged during 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) for an amount of nearly 1 billion dollars. In this case, are accused the former Minister of Energy Chakib Khelil, on the run, the former CEO of Sonatrach Mohamed Meziane (in detention), and its former president Mohamed Feghouli (in custody) for squandering public funds, corruption in the conclusion of public contracts and abuse of functions.
This contract – unveiled in 2016 during the so-called “Panama Papers” leak – has already been the subject of a judicial investigation in Canada for suspicion of corruption by SNC-Lavalin in obtaining contracts in Africa, including Algeria. Instruction led to the conviction of the Algerian-Canadian Farid Bedjaoui, henchman of Chakib Khelil and intermediary between Sonatrach and SNC-Lavalin. Also prosecuted in the Saipem case, in particular for having paid several bribes, Farid Bedjaoui was sentenced in September 2018 by the Milan court to five years in prison.
