more articles:
THird one down relates to yesterdays article and my posts today:
_________________________________
Probe into KBR role in Nigeria bribe case
By Michael Peel in London
Published: August 7 2006 22:06 | Last updated: August 7 2006 22:06
A subsidiary of Halliburton is under investigation by the UK’s Serious Fraud Office over the US oil service company’s part in an alleged plot to pay more than $170m (£89m) of bribes to win billions of dollars of work at a giant Nigerian gas plant.
The SFO said it had carried out searches at business and residential premises as part of the probe into KBR, whose work on the project was underwritten partly by British government money.
The SFO’s action opens a fresh front in a high-profile case being investigated in the US, France and Nigeria. For part of the period under investigation, Halliburton was headed by Dick Cheney, the US vice-president.
The SFO gave few details about its probe, which it said opened in March. The searches were carried out on July 20 at three residential addresses and one company office in London, and at a house in Somerset.
Halliburton said it continued to co-operate and was “committed to getting resolution”. It declined further comment.
The Nigerian bribery allegations erupted three years ago, when a former executive of the consortium working on the gas plant told a French judge it had operated an offshore slush fund to win contracts since the mid-1990s. The consortium is quarter-owned by KBR, through its 55 per cent-controlled British joint venture, MW Kellogg.
More than $12bn has so far been invested in the gas plant, which supercools natural gas into liquid form so it can be shipped. Royal Dutch/Shell is the project’s biggest private shareholder, partnered by Total of France, Italy’s Eni and the Nigerian government.
In 2004, Halliburton severed links with two former employees including Jack Stanley, the former KBR chairman, for having taken “improper personal benefits” in connection with the project. Lee Kaplan, Mr Stanley’s lawyer, declined to comment.
■The bribery allegations centre on the construction of the Nigeria LNG natural gas liquefaction plant. The plant is 49 per cent owned by the Nigerian government, 25.6 per cent by Royal Dutch/Shell, 15 per cent by Total of France and 10.4 per cent by Italy’s Eni
What the SFO is investigating
■The SFO investigation comes after the launch of invest-
igations by a French magistrate, the US Department of Justice and Nigeria’s Economic and Financial Crimes Commission
■Investigators are looking into allegations that TSKJ, the plant’s main construction consortium for the past decade, agreed between 1994 and 2003 to pay more than $170m in bribes to win billions of dollars of building work.
■One of the consortium members is MW Kellogg, a British joint venture in which Halliburton’s KBR subsidiary has a 55 per cent stake. The other companies involved are JGC of Japan, Technip of France and Italy’s Snamprogetti
■The payments in question were made by the consortium to an offshore company controlled by Jeffrey Tesler, a London-
based lawyer, who has declined to comment. His lawyer has denied the money was used for bribes.
■The contracts are for services such as promoting the consor-
tium, advising on contractors and helping to maintain good relations with the client, government authorities and business representatives. They include a no-bribery clause
■Halliburton has severed ties with two former employees including Jack Stanley, a former KBR chairman, for allegedly receiving ‘improper personal benefit’
■Halliburton has said minutes of internal meetings show the consortium had ‘considered payments to Nigerian officials’
Copyright The Financial Times Limited 2006
__________________________________________
Group claims it abducted German oil worker
7 August 2006
ABUJA - A group calling itself the Movement of the Niger Delta People has claimed responsibility for Thursday's abduction of a German oil service company worker in Port Harcourt.
The German was taken in the early hours of Thursday when the abductors forced him and his driver out of his vehicle and took him away in a speedboat.
The group said in a statement that it abducted the German because it wanted his employer, Bilfinger Berger, to desist from its "nefarious regime of dubious compensation and miserly provision of infrastructural amenities" to its host communities.
"We are totally unhappy with BB, especially because the company has
failed to address the welfare needs of the people. We want an immediate change of this policy and demand more jobs for our youths," the group's spokesman, Preye Amazo, said in the statement.
He added that the German had been taken deep into the creeks of the Niger Delta and that any attempt to rescue him would fail.
"We are aware that as an expatriate, he will require all the courtesies possible. We assure that he has been treated with the utmost respect and has been given all the possible liberties he deserved under the circumstances," Amazo added.
"We emphasize that we are not after ransom money for this action. We only desire that our demands are met with dispatch.
The group also demanded the immediate release of two ethnic Ijaw leaders, Diepreye Alamieyeseigha and Mujahideen Asari Dokubo.
Alamieyeseigha is currently facing a 40-count charge of graft for money he allegedly embezzled while he was governor. He was impeached by his state's parliament last December upon his return from the United Kingdom where he was detained for money laundering.
Dokubo is also facing treason charges in court for waging a separatist war on Nigeria in 2004 when he claimed the country lacked legitimacy and had been stealing oil belonging to the Niger Delta people.
Twenty-four hours after the abduction of the German, three Filipinos working for Overseas Trading Services were abducted by militiamen, also in Port Harcourt.
The Filipinos were on their way to work at the Nigeria Liquefied Natural Gas project in Bonny Island, in the Niger Delta, when they were abducted.
No group has claimed responsibility for the kidnap of the Filipinos.
DPA
_____________________________________________________
Analysts: Reforms in Nigeria Threatened
By KATHARINE HOURELD Associated Press Writer
© 2006 The Associated Press
LAGOS, Nigeria — The shock resignation of Nigeria's former economics chief could jeopardize anti-corruption efforts in Africa's largest oil producer, despite promises by her successor to continue reforms, international analysts said Monday.
Ngozi Okonjo-Iweala stepped down as foreign minister Thursday after weeks of having her responsibility stripped away. She was replaced as finance minister just over a month ago and moved to the foreign ministry, then on Wednesday was relieved of her position as head of a high-level government economics team.
Iweala was known abroad as a corruption buster and seen as a key figure in helping secure the cancellation of US$30 billion of Nigeria's debt, Africa's biggest-ever.
"As far as the international community was concerned, Ngozi was the face of reform in Nigeria," said Antony Goldman, a London-based market analyst. "International banks, creditors and finance ministries all looked to her."
Nigeria's new finance minister, Nenadi Usman, promised to continue to implement reforms on Monday but was careful to emphasize her personal loyalty to President Olusegun Obasanjo.
"It is the president's reforms and I work for him. So naturally I must do what he wants," Usman said as she left a meeting on pensions in the commercial capital of Lagos.
But Jibrin Ibrahim, head of the Center for Democracy and Development, a group dedicated to good governance, said Iweala's resignation "dents the government's credibility on economic reform. She (Iweala) is personally so central to the whole process."
He said that the removal of the former World Bank executive _ Iweala was a vice president _ to the Foreign Ministry, an area that was not her specialty, was a sign of a power struggle within the ruling party. He noted that the presidency publicly rebuked Iweala when she spoke of possible corruption in her new ministry last month.
Many Nigerians had seen Iweala as a possible presidential or vice presidential candidate in next year's elections.
"It was a proposal that could easily gain ground internationally and it would be more difficult to stop it then," said Ibrahim, saying that many foreign donors backed her economic reforms.
Obasanjo is barred from running by term limits and has not indicated whom he would support in the race.
As finance minister, Iweala had used the windfall from high oil prices to pay US$12 billion owing to Nigeria's foreign creditors. Nigeria was relieved of the other US$18 billion, the largest such deal in Africa.
Working with Usman, Iweala also built up reserves of foreign exchange, facing stiff opposition from officials who wanted immediate access to the money.
Charles Doukubo, a Lagos-based political analyst, said few believed Iweala left for undisclosed family reasons as stated in her resignation letter.
"She had a family before she took this job and her children are all grown up," he said. "She is a career woman."
He suggested that her removal from the finance ministry and eventual resignation was engineered by members of the ruling party eager to gain easier access to the treasury ahead of next year's elections. Usman, although seen as a capable economist, does not have such a heavyweight reputation as a corruption-buster among the international community.
Oil-rich Nigeria, tied for sixth place as most corrupt country in the world in an annual ranking by watchdog Transparency International, recorded revenue of US$45 billion last year and is due to hold elections in April.
_______________________________________________________
The fact that oil-rich countries perform, on average, worse than other countries has been puzzling economists. The Dutch Disease, it is found by many economists, is relatively easy to avert. The political ‘resource curse’, however, is more difficult to address, and pertains to questions of governance, corruption, and ill-accounted windfalls from the sale of hydrocarbon resources.
The last years have brought international donors, civil society organisations and governments closer together in thinking about how to account those profits in a more transparent way. Kazakhstan is no exception and, like Azerbaijan, Astana has joined several initiatives.
This post is going to shed some light at the most high-profile of these intiatives, the EITI.
In 2005, Kazakhstan joined the Extractive Industries Transparency Initiative (EITI), and a first report is expected to be published in 2006. The EITI, an initiative announced by UK Prime Minister Tony Blair at the World Summit on Sustainable Development in Johannesburg in 2002, aims to ensure that the revenues from extractive industries contribute to sustainable development and poverty reduction.
The EITI is a multi-stakeholder initiative with partners from the government, international financial organisations, the corporative sphere, NGOs and investors. The EITI operates by comparing government revenue from oil and gas related projects to the payments that foreign and local companies declare that they have paid to the government. In case these numbers do not add up, an independent auditor would investigate or mention these inconsistencies in annual reports available to the public.
While the Kazakh government’s commitment to implement stringent EITI standards into their national natural resource accounting is to be commended, several difficulties remain to be addressed. First, most subsurface agreements between the government and international corporations contain confidentiality clauses that prohibit the companies from disclosing information about PSAs. The Kazakh government has yet to agree that such information is being made available to the public and the contractual terms of the PSA are being modified accordingly.
Moreover, as of February 2006, only 38 companies have joined the EITI, while 212 other subsurface companies have not yet agreed to disclose their financial accounts. Among those that have signed up for the initiative are, however, those international corporations whose tax payments provide for the largest chunks of annual windfalls, including ExxonMobil, ChevronTexaco, CPNC, and Lukoil.
The audit company responsible for developing reporting mechanisms, KPMG, has recently been criticised by a coalition of Kazakh NGOs:
Reporting forms of subsoil users developed by international audit firm KPMG were strongly criticized. The participants noted that such reports should contain data on development, sale and income statements and taxation of mining companies.
All in all, however, Kazakhstan’s implementation of the EITI statutes in the accounting for oil windfalls is encouraging. If wholeheartedly pursued, these arrangements could ensure that significantly less high-level corruption around the negotiation of new PSAs takes place. Kazakhstan’s problem with corruption, however, is far too multi-layered for it to be completely eliminated by such high-profile initiatives, helpful though they might be.
