A London court has heard claims from fraud prosecutors that the Monaco-based consultancy corrupted oil and gas tenders in Iraq worth $800m
The SFO corruption investigation centred on oil infrastructure tenders in Iraq in the post-Hussein years
Unaoil, the energy consultancy at the centre of a global corruption scandal, bribed senior Iraqi government officials with $6m to secure huge oil infrastructure contracts, according to a prosecutor in the latest trial of what has become a global saga.
The Monaco-based firm mediated agreements on behalf of two corporate clients for projects worth $800m in the aftermath of former Iraqi leader Saddam Hussein’s fall from power having manipulated tender processes, it is alleged.
The claims were made as the trial of three businessmen said to be connected to the deals got underway at Southwark Crown Court in London yesterday (23 January).
Three businessmen face trial as part of anti-fraud investigation into Unaoil
British nationals Ziad Akle, 45, Stephen Whiteley, 65, and Paul Bond, 68, are charged with conspiracy to make corrupt payments in Iraq between 2005 and 2011. They all deny any wrongdoing.
They are accused of influencing tender processes – overseen by UK-based engineering firm Foster Wheeler – in which supplier contracts for single point moorings (SPM) equipment, as well as two oil pipelines, were awarded to Netherlands-based SBM Offshore and Singapore-based Leighton Offshore respectively.
Prosecuting lawyer Michael Brompton QC – acting on behalf of the UK’s Serious Fraud Office, which has conducted a four-year investigation into the allegations – accused Unaoil, which provided a consultancy service for the contractors, of “buying up” an official named Oday Al Quoraishi to secure the deals.
He was the project manager of Iraq’s state-owned South Oil Company, which was tasked by the Ministry of Oil to rebuild the country’s oil infrastructure in the aftermath of the Iraq war and more than double its crude oil export capacity.
Mr Brompton said: “What happened in this case was the tender process was corrupted by Unaoil and Al Quoraishi – the representative of South Oil Company – acting together in concert.
“We say that came about as a result of Unaoil buying up Al Quoraishi.
“As a result of that, Al Quoraishi permitted Unaoil to indicate what it was that should go into tender documents. He then gave instructions to Foster Wheeler, which sometimes echoed Unaoil’s own interests, but concealed from Foster Wheeler the true source.
“The purpose of all this was to ensure the tender documents suited the company that Unaoil wished to align itself with, and disadvantaged its competitors.”
Contracts were awarded as part of Iraq’s crude oil export ‘master plan’
Jurors were told of a situation in Iraq in 2007 – four years after Hussain was overthrown as president following an invasion by US and British forces – where the Ministry of Oil was undertaking a programme to “hugely increase” the country’s crude export capacity.
The so-called “master plan”, known as the Iraq Crude Oil Export Expansion Project, was intended to boost exports from 1.8 million barrels per day (bpd) to 4.5 million bpd.
But according to the prosecution, the process for allocating contracts for developing the infrastructure that would enable this expansion was manipulated by Unaoil and its associates at South Oil Company to further their own interests.
Mr Brompton added: “It is self-evident that a tender process, whether for works of construction or the supply of equipment or both, be conducted confidentially.
“A process by which competitive bids are made against a specification can only succeed on the basis that each potential supplier receives the same information from which the supplier can prepare a competitive bid.
“One supplier cannot be given access to information to which another supplier does not have access.
“Nor can one of them be permitted to influence the tender package or the evaluation criteria so as to tip the scales in his favour.
“If he does so, the process of competitive tendering ceases to be truly competitive.”
The trial continues.