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Payments From Gas Venture Probed

June 12, 2004|From Reuters

The U.S. government is investigating payments made by a Halliburton Co. joint venture to the Nigerian government in connection with a liquefied-natural-gas plant project in Nigeria, the company said Friday.

Houston-based Halliburton, one of the biggest providers of field and engineering services to the energy industry, said it met with the Securities and Exchange Commission and the Justice Department to discuss the matter. Investigators have asked Halliburton for information regarding the payments in light of the U.S. Foreign Corrupt Practices Act, the company said.

Halliburton, once run by U.S. Vice President Dick Cheney, said it did not believe that it had violated the act but "there can be no assurance that government authorities would not conclude otherwise." The company also said it was continuing to investigate the issue internally.

TSKJ is a Portugal-registered consortium equally owned by Halliburton's Kellogg Brown & Root unit, Technip of France, Eni affiliate Snamprogetti Netherlands and JGC Corp. of Japan.

TSKJ and others have entered into contracts to build and expand a liquefied-natural-gas facility project for Nigeria LNG Ltd., a major venture owned by Nigeria's state oil company and affiliates of three European oil companies (Royal Dutch/Shell Group, France's Total and Italy's Agip).

It has been a difficult year for Halliburton, which faces accusations it overcharged the U.S. government for its food services and fuel-delivery support work in Iraq and Afghanistan.

Its connections to Cheney also have drawn fire, especially after it secured a no-bid contract to repair Iraq's oil fields. Meanwhile, it is in the thick of two separate issues in Nigeria.

In February, Nigeria said it was investigating allegations that the consortium paid $150 million to $180 million in kickbacks to help secure a contract to build the LNG plant. The Justice Department at that time asked for documents in connection with the allegations.

The Nigerian kickbacks issue extended to France, where a French magistrate opened a probe last year into the payments. Halliburton said its representatives recently met with the magistrate and expressed willingness to cooperate.

In May of last year, Halliburton disclosed it owed as much as $5 million in taxes to Nigeria. The company said an internal audit revealed that one of its units paid $2.4 million to an entity owned by a Nigerian national to get favorable tax treatment in the oil-rich West African country. An official from a local tax authority presented himself as a consultant, the company said.

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