Italian Oil Giant Caught Up in Corruption Investigation

From The New York Times

By Gaia Pianigiani and Stanley Reed

The Italian oil giant Eni said Thursday that Milan prosecutors had expanded their investigation of alleged corruption in Algeria involving Saipem, the company’s oil services subsidiary, to include ENI itself and its chief executive, Paolo Scaroni.

ENI denied that it or its directors had any involvement in any corruption in Algeria. “ENI and its C.E.O. declare themselves totally unrelated to the object of investigation,” the company said.

The widening investigation has slashed Saipem’s share price and is now casting a cloud over top management of ENI, which had been reveling in its recent success in finding new energy reserves, particularly giant natural gas discoveries in Mozambique over the past two years. ENI is also the largest foreign oil and gas producer in key North African countries including Libya, Algeria, and Egypt.

ENI’s shares were the second-best performers among major oil companies in 2012, trailing only Rosneft, the state-owned Russian company. The Italian company’s shares closed 4.6 percent lower in Milan on Thursday.

ENI said Thursday that after it learned details of the Milan prosecutors’ investigation in November, it urged Saipem to cooperate with the authorities and take appropriate steps, including conducting an internal audit.

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