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Nigeria gas consortium ‘evasive’, says probe chief

Financial Times: Nigeria gas consortium ‘evasive’, says probe chief

By Michael Peel in Lagos

Published: August 23 2004

The leader of a Nigerian parliamentary investigation into the $180m alleged bribery case against a group of construction companies, including a Halliburton subsidiary, has attacked the consortium for being “evasive” and reluctant to provide evidence.

Chudi Offodile, chairman of the House of Representatives public petitions committee, said the committee had made an interim recommendation that the TSKJ consortium be barred until the end of the inquiry from taking future work in Nigeria, where it is building a $12bn (€9.7bn, £6.6bn) gas project jointly owned by the government and Royal Dutch/Shell, Total and Eni, the oil companies.

Nigeria Liquefied Natural Gas, the company for whom TSKJ is building the gas project, warned Mr Offodile last month of the potential negative effects of disrupting final talks on a $1.6bn investment to expand the project that was announced weeks later, according to a letter seen by the Financial Times. The developments highlight both the frustration of Nigerian investigators and the commercial and political sensitivity of the case. It is the only official probe into Halliburton worldwide that concerns the company’s activities when it was headed by Dick Cheney, the US vice-president.

Mr Offodile said his committee had found Halliburton and TSKJ unhelpful in clarifying their complex corporate structures in Nigeria and outside, adding that TSKJ had been reluctant to give details of some contractual relationships.

TSKJ had just begun to provide a little more information, but the committee was still seeking greater co-operation before it drew any conclusions.

“Halliburton and TSKJ remain evasive up to this point,” he said. Halliburton, which has previously answered questions on behalf of TSKJ, strongly disputed Mr Offodile’s claims. “We continue to work with government agencies to achieve resolution on this matter,” it said. “All of our business is clearly legal.”

Templars, TSKJ’s lawyers in Nigeria, declined to comment.

The House probe is one of two Nigerian investigations into the TSKJ case, which is also being examined by French and US authorities.

Tri-Star Investments, a company employed by TSKJ and run by Jeffrey Tesler, a London-based lawyer, was allegedly used between 1995 and 2002 to channel bribes to Nigerian officials. TSKJ is jointly owned by Technip of France, Italy’s Snamprogetti, JGC of Japan and KBR, a Halliburton subsidiary.

In June, Halliburton announced it was ending its relationship with Albert “Jack” Stanley, former chairman of KBR.

Halliburton also said it would ask TSKJ to “terminate immediately” the services of Tri-Star. Halliburton said last week that the request was still under consideration. Mr Tesler and Mr Stanley’s lawyer have declined requests for comment.

Three separate contracts between Tri-Star and TSKJ, which have been seen by the FT, promise Tri-Star a total of $143.5m in exchange for services such as promoting the consortium, advising on contractors and helping maintain good relations with the client, government authorities and business representatives. According to the contracts, Tri-Star commits not to make payments to government officials.

Mr Offodile said the prospect of parliamentary sanctions against TSKJ had alarmed the management of Nigeria Liquefied Natural Gas, which had pointed out the potential economic damage of undermining the project expansion.

In a July 13 letter to Mr Offodile, which was passed on to the speaker’s office and has been seen by the FT, Andrew Jamieson, NLNG’s managing director, said interrupting the investment decision process on the expansion contract would delay the project by two or three years and could cost the consortium $1.25bn.

Mr Jamieson said he had been unaware of the plan to ban TSKJ.

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